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When we create a company, we prepare for the worst. However, it is not only necessary to know how to manage failure; we must also learn to grow. There comes a time when the business begins to bear fruit and progress, and it is necessary to make certain decisions that can change the company’s direction forever. The dark side of triumph is that success can also die.

Recently, we opened the year, and one of the most repeated goals among entrepreneurs is to grow: increase customers, hire more staff, and start selling abroad. Being ambitious and setting goals is fine, but if you know how to leap.

 

What are the Risks of Business Growth?

You must grow with your head, and for that, the first step is to know the risks or inconveniences that can maximize your business. Then, you will have to create an expansion strategy, which gives you room to maneuver and learn how to act when the time comes to grow.

These are some of the most frequent errors in business growth:

Making bad decisions

When the goal is to grow a lot, and quickly, they end up hurriedly making big decisions. Remember that to achieve sustainable growth, it is necessary to analyze each movement very well, which takes time.

To be indebted more than the account

“To make money, you have to spend money.” How many times have we heard that expression? In a way, it is correct. The thing is that you need to invest to be able to grow. However, you must be incredibly careful with the risks you assume, even more so if you are autonomous. Remember that with this legal form, you have unlimited liability. That is, you respond to the debts with all your assets. Do not play roulette!

Oversize the business

You grow, see that the company works, and want to continue growing to infinity. But what if your business model has peaked? Many employers mistake hiring more staff than they need, expanding a workspace they will never complete, or buying more products than they can sell. If you do not want the same thing to happen to you, go step by step.

Worsen relationships with customers

Sometimes, we want to be like Juan Palomo, especially if we are alone in the business. However, “I eat it, I eat it” has limitations. Accept that you are not a superhero and will need to share your efforts. When all the activity is focused on the expansion plan, it is easy to worsen the quality of the products or services and personal relationships. Loyalty to customers must be a priority. Otherwise, you may manage to grow on one side, but you will be losing on the other in the meantime.

Hire the wrong people

Human capital is essential in a company. The problem is that the rush can lead you to neglect this aspect. If you need someone quickly, one solution is to start with a temporary contract or even with an external collaboration that allows you to evaluate the quality of the worker.

Manage the organization in an inoperative way

This is a frequent difficulty, especially for businesses that sell products instead of services. A small error in the supply chain can have profound consequences, such as excess or lack of stock, loss of income, waste products, etc. In this sense, it is advisable to increase the business progressively and not underestimate this type of task. Growth requires expanding the means to manage the supply chain, from personnel to technological resources.

Chaos management

Many great people and civilizations in human history did not become great overnight. A famous saying goes around: “Rome wasn’t built in a single day, but they had to work for it every single day.” Also, these great people and civilizations were extremely good at chaos management.

Lack of chaos management can eventually become a significant hurdle to your business growth. An entrepreneur or manager should have this characteristic of managing well in chaotic or uncertain situations. Many people panic when the situation becomes challenging to manage. But that is the death of business growth. One should never panic in tough times. Instead, they should maintain their calm and make decisions with utter composure.

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.

Likely, your afore is not enough to survive only from your pension. If you want a good retirement, it is best to build an investment plan. We give you some options.

Retirement implies the finish of acquiring a period for some, except if one decides to function as an expert. For retirees, utilizing their retirement corpus that would assist in keeping charging risk under control and give a standard pay stream is of prime significance. Building a retirement portfolio with a blend of fixed salary and market-connected ventures remains a significant test for some retirees. The test is not to outlast the retirement reserves – one resigns at 58 or 60, while the future could be eighty.

If the Retirement Savings System remains unreformed, those whose savings are managed by an afore will face a complicated reality in their retirement since their pension will be equivalent to only 26% of their last salary.

The above is a scenario in which life expectancy has increased. By 2050, the number of older adults will increase to 32.4 million from 10.06 million in 2016, according to estimates from the National Population Council.

The task of saving and investing seems complicated in an environment in which 61% of workers earn between one to three minimum wages per month, that is, $2,695 at $8,085 and only 4.6% enter more than five salaries a month, that is, $13,475, according to INEGI figures.

However, if you can allocate a percentage of your income to invest for retirement, it is best to plan it now.

Currently, two out of ten people of retirement age must receive help from their family or acquaintances to pay their expenses, according to the 2015 work history survey conducted by INEGI for the National Commission of the Savings System for Withdrawal (CONSAR).

If you already have savings, the first step is to know the different investment products in the financial market and advise you with a specialist, such as an independent investment advisor certified by the authorities or with a stock exchange intermediary.

Both should help you know your risk profile to make the most appropriate investment decision. Below, we list several options:

 

Investment Plans with Life Insurance

Insurers sell it, this instrument deducts a monthly amount from your bank account, and options range from $1,000 per month.

 

Personal Retirement Plans

All financial institutions offer it; like the insurance investment plan, it is tax-deductible. The asset they have is forcing you to save; it is one of the big problems that negligence beats us.

 

Investment Funds

This instrument charges you a commission; you can buy and sell it whenever you want.

 

Exchange-traded Fund, or ETFs

They replicate some value or index behavior; you can access them from the Stock Exchange. Although the amount of contract opening depends on each stock exchange intermediary, some electronic platforms open them from $100, while in others, the minimum ranges from $10,000 to $25,000.

 

To Open an Account at a Brokerage House

They will build a portfolio according to your profile if you take this option. Suppose you do not have the appetite to tolerate the risk of shares. In that case, it can be a combination of stocks and bonds and obtain a return that will be a little more moderate,” says Ezquerra, who indicated that, although this option used to open generally for investors who already have $1 million, there are currently electronic platforms to invest in the stock market, which can be operated with an account starting at $1,000.

When one resigns, and there is a probability of the non-gaining period reaching out for an additional two decades or more, at that point, contributing a part of the retirement assets in value-supported items accepts significance. Remember that retirement salary will be dependent upon swelling in any event during the resigned years. Studies have demonstrated that values convey higher surging balanced returns than different resources.

Naming your business may seem like an effortless thing to do, but it is not. You must produce an impactful name, as a firm business name greatly helps lead generation. Customers are unconditionally attracted to solid business names and prefer to shop from them more often. One must think it through before producing their business name.

When a business starts, most plan a lot of details but always leave one of the most critical factors for the end, choosing the venture’s name, and at that moment, there is total panic. You must have several things in mind, such as the sector in which you will specialize, if you want it to be striking or personal if it will have a significant meaning behind it, or if you want people to identify it quickly.

Do not worry anymore. Here, we will leave several tips that can help you greatly in this crisis where you do not know what to do and think everything is lost.

Tips for Choosing the Name of Your Enterprise

Having a good name makes the difference between boosting the business and slowing down the success process; sometimes, it can lead to failure. Do not be scared after having read that because we are going to tell you everything you need to know to avoid catastrophes; you must follow all the tips that we give below:

1. Must sound aloud

When you are writing your multiple options, be sure to tell them several times aloud, on separate occasions, or as if you included it in a conversation, so it will be easier to notice if it is suitable for the purpose you have in mind.

An excellent technique to achieve this is using a compound that begins with the same letter, as is the case with Coca-Cola. It does not make any apparent sense, but it sounds good when you pronounce it several times, besides not being too much. It is complex to remember and avoid confusion with other products; it is understood in any language and is easy even for people with speech problems.

2. Avoid the 3.0 syndrome

Indeed, you do not understand what we are saying, but understanding is effortless. At some point, you have seen on social networks or web pages that the names are missing several legal words and vowels, to the point that they seem written by a dyslexic person. An example would be VSCO Cam, a popular Photo retouching App that very few influencers understand how to pronounce.

3. Forget the initials

We will not deny that some brands, such as 3M or IBM, have achieved enormous popularity, but this is due to their significant effort and quality. The reality is that using acronyms is not very striking. It limits creativity in advertising and does not say anything about you or your business.

You will only have a small business, not a great international company. Having realistic ambitions, trusting the most notable names, and attracting potential clients is essential.

4. Make sure you can register it

If you want a sizeable long-term brand, investigate whether it exists in the market. It does not matter if it is in another continent and you believe nothing will happen. Plagiarism is not a good option in any case. For this, you can get a handy tool, Google AdWords, to see the local and global searches like your chosen name.

In addition, you will know if, when searching, your company appears between the keywords or in similar phrases in a different heading. You can also find out if making a slight change in the name that this consideration can give you a better position on the Internet and even take the first step necessary to be the first SEO of your future online site.

Creating the name of your endeavor may seem extremely complicated at first, but you should not despair or start thinking about the worst. You should just take a break and follow all the advice we have given you in this post. You will see how you do much more quickly to find the best option for your business.

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.

Victorious bookkeepers instantly identify that client satisfaction should be their topmost priority as it’ll ultimately prosper their company. For business owners, bookkeeping can be a tremendous hassle, and multiple issues arise during the entire process just because of the lack of general comprehension. Therefore, companies always consider their client relationship as a partnership, even when their journey is challenging.

Many clients are calm and easygoing and appreciate the efforts made by bookkeeping advisors. Also, they acknowledge the dynamics of the trade. In this regard, clients usually compensate the bookkeepers based on mutually agreed-upon policies before working together. 

However, there are times when bookkeeping firms must deal with complex clients, but the ratio of their appearance is low. These clients are demanding and become rude or angry even on the slightest issues. At times, they can consume much of a bookkeeper’s valuable time.

For these reasons, differentiating between the potential clients is of pivotal importance. Here’s a short guide for understanding the nature of such clients.

1. Aggressive personality

The aggressive clients intend to impose their perspectives on bookkeepers and are very strict about deadlines. Such clients get angry instantly and are often verbally abusive.

2. Over-efficient

The kind of client who appears to showcase his wisdom about a bookkeeper’s services as if he knows everything better than him, and in the wake of displaying such services, such a client becomes highly arrogant.

3. Complainers

The clients who are always unhappy regardless of satisfactory services are the complainers. It is because they feel like they are being treated unjustly.

4. Confused clients

The confused clients kept asking the same questions about a particular service and couldn’t decide on their own.

Top four strategies to handle bookkeeping client issues:

Undoubtedly, dealing with demanding clients is tough, and the main challenge is dealing with their superiority. Usually, we reciprocate the behavior we get. However, this would lead to losing valuable clients and the goodwill of your bookkeeping firm. To solve any conflict, we must deal with them gently and patiently.

The following ways can help you resolve the issues with the bookkeeping clients.

1. Listen to the client’s queries

In case of disturbance in providing the services, clients often get frustrated. However, there are situations when the issues don’t arise from your end. In such cases, clients expect bookkeepers to listen to them attentively, and they also want the problems to get resolved without any delays. As a bookkeeper, you must answer their queries with utmost patience and vent their exhaustion.

2. Comprehend and apologize

It is a significant part where many bookkeepers falter. When a bookkeeper faces a complicated client, he usually starts challenging the client or makes excuses. He tries to end the dispute instantly to ease his distress. Remember that when clients get irritated, they expect an apology from the advisor to put things right for them. For this purpose, identifying what has disappointed the client instead of making excuses would be more feasible.

3. Analyze the problem by asking questions

The most appropriate way of handling a rude customer is by showing compassion. A cordial speech would be enough to mellow down the client’s anger. Once he gets calmed down, ask him questions regarding the current issue. This activity will present your concern about the challenges faced by the client.

However, the questions must be relevant, and you should also provide reasoning. Also, keep the conversation precise and positive. If you can’t handle the case single-handedly, you can always opt for better professional advice.

4. Generate creative strategies for their cases

Since demanding clients behave incorrectly, they won’t hear your explanations, even if they don’t occur on your platform. They don’t care if you’re stuck, too; they want to get their problem resolved. As a bookkeeping consultant, you need to acknowledge their concerns and develop effective solutions. There is a possibility that you must go the extra mile for their contentment, which includes asking for their suggestions and ideas.

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.

If you want to keep your account records clear and straight, you should record all the purchases made during a specified period. While recording inventory purchases, keep a few factors in mind: original purchase price, trade discount, purchase return and allowance, transportation cost, and ownership and transfer fee. Inventory is a significant aspect of almost any company or business. Buying and selling inventory is very important. You should track the primary activity, purchases, and sales of your inventory items with the unit’s inventory accounting system. In the language of business, the term inventory describes the products and materials held by a company for the ultimate purpose of resale.

• Inventory entries

Inventory works as a kind of asset. An asset refers to any property a company owns, physical or non-physical, that helps add value to their business. Assets increase if you have debits and decrease if you have credits. Debits and credits considerably impact many accounts that record journal entries for inventory—such as accounts payable, finished goods inventory, raw material inventory, and merchandise inventory.

• Manufacturing of a product

While manufacturing a product, you have to look at multiple inventory journal entries. You should review physical inventory levels at the end of the year to calculate the cost of the goods sold. It is advantageous to make a physical inventory list at least once yearly, write down the date the transaction was completed, and mention it in the left column of the given account’s balance sheet.

• Establishment of inventory controls

The most critical step when managing inventory levels is safeguarding your inventory from theft and damage. Ensure that those workers who perform your financial management, manage inventory controls, and perform accounting entries know those inventoried items well. Make access limited for inventory supply and apply specific procedures for shipping and receiving products. Also, label inventory before storing to access the items quickly. Lock areas where you hold products when operations are closed. Being overly organized will help you access these items when needed and minimize losses to theft or carelessness. You must keep damaged products separately and keep a record of damaged products on the waste sheet.

• Goods for resale

Implement purchasing and receiving procedures because you must add goods intended for resale to inventory through the receiving process. When receiving the goods, make sure that the packing or receiving slip matches the invoice and materials. Debit the inventory account to record the inventory purchases. If a person knows about COGS accounting, he should understand that COGS is how much it costs to produce goods or services. The cost of goods available for sale equals the starting value of inventory plus the cost of goods purchased. The cost of goods sold also equals the cost of goods available for sale, less the ending value of the merchandise.

• Physical inventory

Perform physical inventory audits on an annual basis. While conducting a physical inventory audit, it is of great importance and very vital to create an accurate balance sheet. Physical inventory reserves directly impact units’ cost of goods sold, profit, and revenue. Also, it affects the information on the financial statements. There are two systems to account for inventory. These include the perpetual system and the periodic system. So, the company uses one of these two systems to make a journal entry for inventory purchases. In the journal entry of inventory purchase, the difference between the perpetual and periodic systems is just on the debit side. The amount of inventory purchased in the perpetual system is posted to the inventory account while it is assigned to the purchase account under the periodic inventory system instead.

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.

An official audit is a documented explanation of whether or not a company’s financial statements are materially accurate, along with the standards, assumptions, and evidence used to conduct an audit. Suppose the IRS audits your business tax return. In that case, the platform carefully examines whether your business included the total income or applied only the tax deductions and credits allowed by the law.

The IRS audits are not random but a planned procedure. IRS selects such tax returns with errors based on complicated criteria. After filing a tax return, the IRS has three years to begin and finish an audit. However, these officials are professionals, so they consume less time than expected to complete the process.

During this time, the IRS will require financial information and documents explaining the position of your business tax return. So, providing them with the correct details is your responsibility.

Internal and External Audits

As an entrepreneur, acknowledging the differences between internal and external audits is paramount. This is because both the audits serve different purposes.

A CPA consultant has to perform an external audit, and it is only responsible for the auditing process and doesn’t involve taxation matters. However, many consider them to be a more reliable platform than others.

On the contrary, the employed accountants or bookkeepers double as internal auditors. They might perform the same activities as the external ones but also handle minor financial tasks. In some cases, the external auditors rely on the internal ones to manage monetary functions.

For a sound auditing procedure, you must take every step attentively. Here’s a step-by-step guide for managing your firm’s finances, ultimately leading to a smooth auditing procedure.

Step 1: Strategizing

For the successful execution of an audit procedure, creating a strategy would be the most feasible option. The planning phase might include scheduling and group meetings with your audit officials. In most cases, the department manager must provide all the necessary information.

Step 2: Reviewing procedure

Next, the assigned internal auditors will review your generated policies and financial management/ the purpose of this activity is to ensure that your written strategies perfectly align with your company’s standards. To avoid any inconvenience, you have to identify the departments ignoring the imposed policies made by the organization.

Step 3: Fieldwork

During this period, the auditor physically visits your company to examine if you’re working legally or not. Your workforce must follow the rules and regulations to pass this audit. If any employee alters roles within the platform, you must adjust immediately. Fieldwork includes meeting with the management and employees and enquiring them about the regular activities and tasks.

Step 4: Follow up

During the report inspection, the auditor often finds missing information. For instance, if any notice gets misplaced, the officer will ask for it immediately.

If an employee fails to provide an authentic justification, he must clarify it in the board meeting. However, most auditors explain the situation before submitting the findings.

Step 5: Reporting

Once your auditor examines all the provided information and completes the review process, he will issue a draft report, which delivers audit results.

The reports include an independent evaluation of your company’s strengths while stating the weaknesses and recommendations for corrective execution. The internal auditor will make sure that the information has no additional issues. After reviewing, the auditor proceeds with the final report.

Step 6: Looking for errors

If you find any hidden issues within the report, you need to track the source immediately and implement accurate internal controls to alleviate the problem with written documentation. It appears to be a simple process. So why do companies find it hard to make audits a priority? This is because an audit is a highly time-consuming process, which makes it a draining procedure. 

The demands of managing a business can be pretty overwhelming, and it might not be easy to prioritize among tons of tasks. Hiring an accountant to review your finances is a significant decision. Undoubtedly, auditing is an exhausting procedure and consumes valuable time and cash, but the benefits of this process outshine everything. 

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 wake of COVID-19, work-from-home (WFH) has become the norm for most organizations in the corporate world. Working from home may sound like a dream to many, but the fact is that it comes with its fair share of problems that require using the right tools to overcome.

We have narrowed down the list to a total of 7 tools you must have to ensure the smooth functioning of the work you carry out. These tools are essential and could ultimately make or break your productivity.

Internet Calling System

Working remotely requires you to always stay in contact with your coworkers. That is the only way to promote efficacy within the organization. You need to have a system of communication that allows you to stay in touch with your coworkers.

Open communication is incredibly efficient in international parties because it makes completing tasks very easy.

Nextiva is excellent for internet calling.

Project Management Tools

As the name suggests, companies use project management tools to track and manage ongoing projects.

It can often be difficult to manage many projects all at once, which would add to the complexity of the already strenuous task. Project management tools allow the user to keep track of all the functions at hand and meet all deadlines.

The tools also can send reminders when a deadline is close, which would be very convenient for those working remotely.

Hive and Monday are great options for those looking for project management tools.

Help Desk Tools

Companies use Help Desk Tools to help all the clients and customers affiliated with the organization.

Customer service plays a significant role in how your business or company is received in the public eye. Your organization will likely flourish if the customer service is quick and apt. So, these help desk tools will make the task easier regardless of your location.

Guru focuses on problem-solving while also making the job easier.

Internal Knowledge Base Tools

Although less used, these tools could completely upscale the functioning of your operation by creating a communication system, especially when onboarding, to give out instructions and ensure that all the group members can communicate effectively.

A confluence is a good option for this purpose.

Video Call Tools

Video conferencing is the most crucial part of working from home. These virtual meetings ensure the workforce discusses all agendas and you distribute information to the correct people.

These tools are a quick but secure way of getting into conference video calls so that these meetings can take place virtually and the work does not lag, no matter what.

Zoom quickly rose to fame after the onset of COVID-19, which makes it a good option.

Collaboration Tools

The primary purpose of these tools is to allow you to collaborate and share with your teammates.

These tools are excellent for handling projects that require working with their group members.

For this purpose, collaboration tools are used by those who need to work in a team.

Discord and Slack are well-liked options in this area.

Time Tracking Tools

This one is a no-brainer.

These tools allow the user to keep a proper check while they work. Such devices are used mainly by the managing staff to keep track of the rest of the employees, assisting them in tracking the working hours of all employees so that they receive payment accordingly.

The primary purpose of these tools is to prevent any dodging on the employees, which can sometimes be the case in the corporate world.

TimeDoctor is an excellent tool that gets the job done.

Using these tools would improve and upgrade your working experience. Working from home is often associated with low productivity levels, but you won’t complain once you have these excellent tools to assist you.

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.

When you order a product or service from a vendor, the vendor might ask for a portion of the payment before the delivery. While managing the other accounting tasks, business owners often forget vendor obligations.

However, you must prioritize their demands and record the deposits accurately to maintain your books. It is because it is a mandatory payment and is called for serious attention. Ignoring these payments might cause late delivery of a product you need immediately. The prepaid payments have no potential loss, but recording all the transactions at the end of the year can be challenging.

Are Prepaid Vendor Deposits Justified? 

Usually, businesses ask for upfront payments for the products and services to remove uncertainty. Primarily, you’ll make the payments partially, but you’ll make the payment in full after delivering the entire product. However, prepayments won’t be necessary if you have known the vendors for a long time and have a cordial relationship with them.  

The prepaid amount is written as paid in the accounts for the ordered supplies because it is your possession, and the vendor is just holding it for you until the products get delivered. Occasionally, the business must make a deposit on the equipment it is purchasing before shipping.

The company is trying to purchase from a new vendor for credit establishment. The business already has a credit history with a vendor who delivers products timely without asking for advance payments. There are numerous ways to account for prepaid vendor deposits, and the most intelligent way is to make a recording on a company’s balance sheet.

The Asset Portion

The asset column on a balance sheet shows items the company owns. The value of these items can be expressed in dollars or pounds. The asset column usually includes bank accounts such as savings or current accounts, account receivables, inventory, and equipment. Prepaid expenditures are also considered assets and might involve prepaid insurance, security deposits, rent, and prepaid inventory (referring to the deposit made on inventory but not yet received).

Temporary Assets

Temporary assets are usually defined as assets that will be utilized within a year. If the deposit belongs to an invoice that will be received and the payment is due to a vendor, a category for prepaid inventory will be created on the balance sheet under temporary assets.

Permanent Assets

Permanent assets are generally defined as assets having value beyond a year. Often, money is paid to the vendor that won’t be applied to current invoices. Instead, it is utilized as a security deposit against possible future non-payments. For such assets, the category for prepaid inventory will be created under permanent assets.

Creating Entries

When a deposit check is sent to the vendor, the accountant records the cash transaction on the balance sheet by crediting cash and debiting prepaid inventory. It will enhance the asset’s value and lessen the amount of available cash. If the check is utilized as a long-term security deposit, there’s nothing required until the money is applied against a final invoice.

When the deposit is applied against the vendor’s invoice, the accountant must credit the prepaid inventory account, including the balance with accounts payable. The balance of invoices must be paid in a similar way that bills are usually paid. If the cash is returned to the company, debit the cash account and prepaid credit inventory, reserving the original entry.

Returning the Prepaid Vendor Deposits

Vendors are obliged to return your deposited payment after a certain period, and the most frequent way to return is through a check. When the check is received, you transfer it to your bank account. This way, your bank account will be debited, and your deposited account will be credited.

Managing a business requires a flexible approach and involvement of standard norms of the industry. Inventory and merchandise are mandatory for any business venture; eventually, you’ll coordinate with tons of vendors along the way. Maintaining cordial relations with them is always beneficial, as prepaid deposits are an investment rather than a financial burden.

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.

Staying on top of your finances is a significant part of being a successful business owner. Financial records must be accurate to contain the tools you require to make wise business decisions and healthy cash flow. As your business grows, more customers, employees, and suppliers join your venture. In such circumstances, keeping track of your finances by yourself gets pretty challenging.

When accounting and bookkeeping tasks get too hectic for you, it’s time to hire a professional. But do you need an accountant or bookkeeper? While there are some overlaps in their duties, there are differences between an accountant and a bookkeeper.

Here are the differences between an accountant and a bookkeeper to help you understand which one you need.

Accountant Vs. Bookkeeper

An accountant is responsible for interpreting and assessing a company’s financial records and maintaining them. An accountant is more professional and skillful than a bookkeeper, who handles cash transactions.

Generally, an accountant has a certified degree and is paid exceptionally better than a bookkeeper. Practically, a bookkeeper has to report to the accountant.

A bookkeeper doesn’t require any training sessions, but a bookkeeper’s job is of pivotal importance. The information gathered by a bookkeeper determines how an accountant will interpret a company’s financial records. Based on this collected information, the accountant advises the entrepreneur about tax issues and other financial operations.

Bookkeeping and its Functions

Bookkeeping is a component of accounting that deals with the systematic recording of financial activities. The essential purpose of documenting cash transactions in a business is to estimate income and expenditures at the end of the year. In every company, financial decisions are made according to the bookkeeping records. However, it only reflects the cash flow management of a company.

Bookkeepers are in charge of recording accurate financial records regularly, including the internal and external cash flow. They must be proficient with the financial books and reviewing accounts. It would be appropriate to say that accountants couldn’t provide comprehensive suggestions without a bookkeeper and their information. Bookkeepers are appointed with essential duties, and they might be held accountable in case of crises.

The duties of a bookkeeper include:

1. A bookkeeper has to maintain financial records and create a backup if necessary.
2. He is responsible for handling banking deposits.
3. A bookkeeper has to consider government regulations before making any decision.
4. A bookkeeper must verify the accuracy of financial information before forwarding it further.

Accounting and its Functions

Accounting is a systematic procedure that utilizes financial information the bookkeeper collects to make valuable monetary judgments to establish a business. Once an accountant wisely determines internal and external cash management, he must make crucial decisions about a company’s financial future.

Undoubtedly, accounting and bookkeeping are essential requirements of modern times. Entrepreneurs usually lack the financial wisdom to operate their finances, so they must hire professional accountants and bookkeepers. With easy access to incredible accounting services, companies prefer to utilize accounting software and virtual tools. Furthermore, it allows businesses to focus more on profitability and less on accounting affairs.

The primary duties of an accountant include:

1. An accountant reviews the collected data and keeps it updated.
2. An accountant generates standard business reports required by the IRS.
3. He ensures that the entrepreneur is following current industry standards.

Some small businesses couldn’t afford to hire an official bookkeeper, so an accountant will fulfill the responsibilities of a bookkeeper, too.

Business financial records are accurately balanced by the bookkeepers and strategically filed by the accountant, contributing equally to the long-term success of a business. Some entrepreneurs learn to record their finances, while others appoint a professional for monetary purposes. Whether you hire a bookkeeper or an accountant, you must seek professional certification to show their commitment and accuracy towards their profession and duties.

Conclusion

In conclusion, managing finances is crucial for business success. Choosing between an accountant and a bookkeeper becomes vital as your venture grows. Accountants bring expertise in interpreting and assessing financial records, while bookkeepers handle daily transactions. Both are integral for accurate financial insights. Small businesses may opt for versatile accountants covering bookkeeping duties. Regardless, seeking certified professionals ensures commitment and accuracy, contributing significantly to long-term 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.

When starting a small business, you must figure out financing. Most entrepreneurs think of using a bank or a lending institution. While these are always viable options, you should also consider getting financing through other financing options. 

Because of technology and the internet, financing, and loan options have expanded. These options should be explored via your business plan and through further research of the financing options you may have available. 

There are options for small and more significant loans outside traditional banks and lending institutions. 

Here are four ways to finance your business and some helpful tips when pursuing financing.

Personal Microcredits Online

Microcredits or online loans are becoming more common and generally are small enough that even those with bad credit can obtain this type of loan. While these loans are more easily obtained, they are only helpful for small needs. 

These loans are requested online through platforms such as Credit Cashier, ranging from $50 to $300. This financing option offers flexibility and gives you thirty days to repay the loan from the approved loan and issued. It also has a lower threshold of credit score requirements. While this loan is not large, it is fast and can help you with immediate needs that are less expensive.

Angel Investors

If you need not just a small but a more significant investment, from $50,000 to $200,000, you can seek out angel investors. These investors often provide financing, business experience, and contacts that will further your business. 

Angel investors are professional investors who are both entrepreneurs and philanthropists. In some cases, they invest without expecting a return. Other angel investors will look for some level of return on their investment. These investors tend to finance riskier businesses that other investors and lenders won’t approve.

Crowdfunding

Crowdfunding is based on a model of mass financing or multiple-investor financing. Different people interested in the start-up and promotion of a project become prominent investors or patrons. In collective funding, the project is endorsed through financing and confidence. The internet and social networks make it possible to quickly publicize a business idea, which triggers many potential investors.

 

Public Subsidies

The aid of official government or public subsidies that offer grants and loans is another unconventional option outside the traditional banking institutions. This type of financing can boost your business or fund a specific project without paying it back. While these grants or loans are ideal since they are free money, they are challenging to obtain. 

Public subsidies require much time and paperwork to process and are often declined since the grants and loans are limited to a certain amount a year. The application process is complicated, and the chances of obtaining these are low, but these options are worth a try because you don’t have to pay the grant or loan back.

Tips When Requesting Financing

To successfully obtain financing for your small business or project, remember a few things.

• A matter of Faith: You must believe in your idea and trust in its success. Convincing investors to finance your business or project will depend on your belief in your business and yourself.
• Time and Dedication: Do not give up after the first rejection. Finding investors and financing is possible, but it is not an issue overnight as it requires a continuous search.
• Initial Financing Plan: This plan accounts for financing needs and available resources. It is usually presented as a table through an investment or financing plan or a complete financial study with cash flow and analysis of key ratios and magnitudes.
• New Technologies: Use the internet and social network connections to help you find and attract future investors.

Conclusion

In conclusion, financing your small business goes beyond traditional banks. Explore online microcredits, engage angel investors, utilize crowdfunding, and consider public subsidies. Each option has merits and challenges, so tailor your approach to your needs. Persistence, belief in your idea, and a well-thought-out financing plan are crucial—leverage technology to broaden your connections and attract investors.

Remember, success in obtaining financing requires dedication, time, and a continuous search for the right fit for your business or project.

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.