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Accounting and bookkeeping are the key functions in any business. Small businesses face challenges in accounting and bookkeeping procedures. Accounting is the systemic and comprehensive recording of financial operations in a business. Business bookkeeping is the recording of financial transactions as a part of the accounting process.

Entrepreneurs and business owners often do not see that common small business accounting mistakes are a major threat to the growth of their business in the long run.

Biggest Bookkeeping Challenges For Small Businesses

Not Using the Best Accounting Software

Choosing the correct software is among the biggest accounting challenges that small businesses can face. An important and challenging step in business is to choose the proper software per your business needs. Consider it’s cost, usability, and extra features when choosing a suitable bookkeeping software for your small business.

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

The cost of an accounting software is an important issue to consider. First, plan out your business needs and finances. Purchasing a costly software with highly-advanced features will not help your small business if you do not need these expensive features. A small business owner can plan to purchase an accounting software by providing a full payment at once or they have the option to make payments in installments or monthly payments. Plan to purchase the software that suits your business finances the best.

Financials are Incorrect

Incorrect financials is a threatening accounting problem in your business. If your financials are incorrect, it may sink your funding round in your business.

Any error in your financial statements leads to big loss. Business bookkeeping and other business operations will go into a mess if you do not keep your financial data up to date. Your accounting statements must be clear and transparent. Income and expense statements must be precise and related to the cash flow and balance sheet. Delayed data entry is a big risk of frauds and thefts.

Financials are not Produced Monthly

In a small business, it is often thought that it is okay to produce financials on a quarterly or bi-annual basis. However, monthly financials show investors that you are closely monitoring your business.

It can lead to negative balance if expenses are made but no income statement is updated. Invoices to be paid by the company may go unnoticed and it can put a bad reputation on a company. It can end terms with the suppliers. Business growth is halted or significantly reduced.

Business Owners mix Personal Finances with their Business Account

If you mix your personal and business finances, you cannot correctly estimate how much profit was generated out of your invested capital.  For example, if a business credit card is utilized for personal expenses during a trip or dinner, later on, this amount could be paid from the company’s income.


Covering Small Expenses out of Pocket without Recording

Paying  for business expenses out of your own pocket will eventually make your company look stronger in income than it actually is. It is extremely important to record everything so that you have a true picture of where your company stands financially.

Starting New Projects and Ideas without a Clear Budget

If you start a new project in your business without planning for it, you can easily run short of your budget for other business operations. You may have to quit the project in the middle if you don’t get the loan or find other investors. It’s important to always plan ahead before making big moves.  

Not Using Accounting Software or Cloud Technology

Failure to set up the correct software needed by your company leads to poor decision making. Installing the wrong (more complicated than required or lacking crucial functions) software can lead to more complexity in accounting. Accounting software prevents accounting and bookkeeping errors. Many software come with guided help boxes to make an accounting process easier to interpret. Inventory control tools are provided in software. Tax matters are made easier using accounting software.

Poor Interpretation of Accounting Information

Accounting information software is only a tool to use. Decisions must be made after completely checking the reports and interpreting the data. Data interpretation is made by comparing financial statements with the cash flow statements and balance sheets. This interpretation can be complex and hard to understand, therefore hiring a bookkeeping service may be ideal.

Entrepreneurs and business owners must focus on the long-term consequences of decisions they make after getting the full picture of accounting information. Making short term decisions after interpretation of accounts data does not provide the business with any long term benefits.


Conclusion

Small businesses face the biggest accounting challenges. Either they are running short on resources to keep an up to date accounting and bookkeeping picture or they are not using the correct software for their accounting. From choosing a proper accounting software to managing accounting tasks correctly as well as keeping them up to date are among the biggest accounting challenges that small businesses face.

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 holds invoice of electric power usage
Whether you are working in the creative industry or you have your own gadget store, it’s not easy to avoid the “elephant in the room”. There are multiple mistakes even experienced entrepreneurs make while setting up their business practices and culture, which makes it harder for them to recover payments from their clients. For an entrepreneur, the payment made from their client’s end is their lifeblood. Negligence of clients can even halt the business itself, especially at an initial level, as the company’s future bills are funded by client payments. The internet has grown so far that people are using multiple methods to approach their clients globally. However, not keeping a secure payment method has caught our attention regarding the missed or late payments from the clients’ end. Although, the clients, especially those who are using the internet as their only source of communication, are skeptical regarding paying in advance. Therefore, expecting them to pay a complete upfront payment is not possible at an initial level when you have just started your business. At times, clients make unnecessary delays or deductions after the delivery of their desired product or services which is accounted for as a bad debt account for entrepreneurs.

If you are struggling with this issue, here are a few practical bits of advice for you that can help in recovering your stuck money and even help you in avoiding such scenarios.

Tips to Secure your Payments

Choose the Right Client

Your ideal situation is when you only attract paying clients. Evaluate the clients as they are approaching you for your work, as this will make it easier for you to shortlist the clients you actually want to work for and benefit from. Here are few tips from which you can easily choose the right client base.

1. Raise your Worth

Selling a product or offering a service? Keep your rates at or above the market price. Selling services at a price that is too low will make you more approachable to frauds or less ethical clients. However, the people who are satisfied with your quality of work will be willing to pay you the average market price or even a premium price for your quality.

2. Design a Proper Payment Policy in Advance

Once you have a proper payment policy for your product or service, the client will get the idea of your fixed payment policy. This will depict your professional attitude towards your work. Your professional policy should cover all of the aspects of your best practices as it will act as a preventive for fraudulent cases. The policy should include:

  • Your invoice duration such as weekly/bi-monthly/monthly or project wise
  • Your terms of payments
  • Penalties in case of any late payment
  • Your detailed rate structure that includes basic per hour rate and monthly rate of that project
  • Payment methods that are acceptable to you
  • How you will handle late payments
  • How your company will recover missed payments from the client

 

Identify your Clients while they Talk

Don’t waste time after you have invested your work and money on providing the customer’s desired product. Dealing with late or missed payments later is a frustrating experience. Therefore, one should identify the seriousness of their clients before they start to work on their project.

  • Avoid bargaining
  • Understand the client’s psychology and their potential to understand you
  • Get a contract signed, even for smaller payments/projects
  • Look for clients through references as this will be a more solid and secure source

Always Maintain your Records

Bookkeeping is a very beneficial and necessary part of an entrepreneurial business. The most successful strategies of keeping your payments secure is recording all of your transactions, bad debts, and accounts receivables in detailed records that can help you later in analyzing how much work you are providing and how much you are owed.  

Be Serious about Getting Paid

Sitting and waiting for payments will not solve your problem. You need to personally be proactive in seeking all of your expected payments.

  • Contact the clients as soon as the deadline has passed
  • Start charging interest on late payments
  • Keep nudging the client, even after a month or so
  • Send a demand letter to the client’s address
  • If you are still unsuccessful, contact a collections agency 


Be Ready to do Something

Starting up your own business is not a cup of tea and managing it is a much tougher job. Dealing with your employees as well as your customers is a challenging task in itself. If a client is missing their payments or canceling the payment altogether, you should not wait for the end result. Rather, you should adopt a proactive approach to do something regarding the issue.

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.

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QuickBooks is a complex accounting software that requires proper knowledge and training. The nature of the application is quite multifarious which can create problems for users with little or no prior training.

Every department of business has multiple software for managing their workload online.  A sales force of a business uses a CRM system (Customer Relationship Management) to manage their customer feedback, connectivity, customer complaints and all other customer-related tasks. Similarly, to manage accounting and bookkeeping related tasks of a company, businesses often use proper systematic software that can help them in managing their finances. QuickBooks is one such amazing accounting tool that is mostly adopted by small to medium scale businesses.

What is QuickBooks Software?

QuickBooks is an accounting software designed by Intuit Inc. The software provides a set of accounting solutions to businesses which help in managing the payroll, inventory, sales volume and multiple other small business functions. The software’s key features are:

  1. Marketing based tools
  2. Products and supplies
  3. Services for the merchant
  4. Training solutions

However, every solution is designed in accordance with the needs of the business and industry they are operating in. The best thing about Intuit’s business solutions is that they have customized products for every contractor. For example, construction contractors get:

  1. A QuickBooks Enterprise solution for contractors
  2. A QuickBooks Premier contractor
  3. A QuickBooks Pro
  4. A simple starter plus pack

All of these products are specifically designed to meet the needs of the contractor to small to medium-sized companies. This makes QuickBooks the most powerful software which cannot be learned by using a trial and error method. Learning this software requires extreme practice and proper training. However, even trained QuickBooks users skip a few essential tips and tricks that can help in making the accounting and bookkeeping processes easy.

4 Things that you Didn’t Know you could do with QuickBooks Data

  1. QuickBooks is a gold data miner with different versions with different prices and features

As you already know, QuickBooks does not only come with one single software to fit every industry. Rather, it provides multiple solutions to its customers according to their needs. The features available in QuickBooks depend on your business type and the growth of your business. The data you will record through QuickBooks will be all yours. Once your data file is created, you have free access to all of the data which can be later used in a business analysis for your customer survey.

  1. Integration with other business applications that can indicate critical information about your business

Most small-scale businesses have multiple desktop or cloud-based software that help them in carrying out their business operations. By integrating this software with QuickBooks, you will be able to utilize your QuickBooks data with other business software. There are many other business applications that are now providing QuickBooks built-in integration.

  1. Utilizing QuickBooks Data

QuickBooks data has all of the major information about a business’s customers, products, employees, productivity level of employees and the volume of business sales. To best use this data:

  • You have to eradicate the data from QuickBooks and place it in the analysis database.
  • Then, you will need the tool for reporting and analysis process which is properly integrated with QuickBooks data. It will then allow you to see any type of data you need.
  • For bookkeeping purposes, you will be required to create a QuickBooks report that will help you in visualizing the data on a regular basis.

  1. It helps in decision making

As you save and monitor the data of QuickBooks in the shape of reporting files, your company will make more accurate decisions. You will be provided a clear picture of your business that will allow you to make wise decisions for your company’s success.

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.

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Value Your Hard-Earned Money

The biggest misconceptions about household budgeting are spending less, compromising on your superfluity lifestyle, and financial restrictions on everything, which means no family hangouts, no shopping, and no vacations. Budgeting may be associated with a frugal lifestyle but it doesn’t have to be in reality. Budgeting doesn’t have to make you spend less but it surely allows you to spend smart, as it prevents you from overspending on less important items. Staying on top of your hard-earned money is essential for ideal budgeting because, without knowing your monthly expense limit, you cannot expect to have success. Similarly, you cannot expect to make better financial decisions and projections if you do not have a clear picture of your cash flow or finances.

Allocating Your Paycheck(s) Wisely

Although people may have different perspectives about household budgeting, no one can deny the fact that households can save a lot of money for hard times if they budget their monthly paycheck(s) properly. Households must set their priorities and budget their resources effectively in order to have a financially secure and stable future. Creating a household budget to limit certain extraneous expenses and knowing the actual status of your finances requires a lot of commitment, patience, planning, and wisdom. In fact, it is your motivation and determination that encourages you to save for your family to meet financial uncertainties and emergencies.

Budgeting Helps in Maintaining a Healthy Lifestyle

Cutting monthly expenses is certainly an intimidating task for most households, especially for those who have just tied the knot. You and your significant other ideally need to make a household budgeting plan right from the beginning in order to have a financially secure and healthy lifestyle. The need to manage your paycheck(s) has become more intense than previous times which means an ideal management of resources is nearly impossible without making a proper budgeting plan.

Household Budgeting Options

Households that cannot budget their paycheck(s) properly have two options to consider. 1) Hire a budgeting partner 2) Employ household budgeting software. Those who find it challenging and costly to hire a personal budgeting mentor can utilize advanced budgeting software to budget their monthly paycheck(s). All that you need to do is search and utilize the software that has the capacity to deliver you the best results and budgeting plan according to your needs.

Managing Accounts with Accounting Software

Have you ever wondered why so many start-ups fail to manage their internal and external finances? The reason is obvious. They most likely lack the accounting knowledge, skills, and abilities to manage their finances and reduce costs that can be avoided. Plus, they also fail to maintain an order in their cash flow (influx or outflow of cash). Sketching a clear picture of your financial standing may be hard but not impossible. Businesses also have two options to know the current financial position of their company. Either to 1) Hire an accounting professional or 2) Use accounting software.

Accounting Software Or Household Budgeting Software—Is There A Difference?

Yes, accounting and household budgeting software are completely different from each other but both serve the right need of their own respective domains! Accounting software helps business owners to reduce costly errors, minimize tax bills, repayments of debt(s) and, hence, help businesses of every scale to know the exact status of their finances for making financial projections. On the other hand, household budgeting software helps families to manage their monthly paycheck(s) and allocate their hard-earned income wisely.

Accounting and Budgeting—Done Right!

The best part is now you have access to the finest accounting/bookkeeping agencies that will not only help you to manage your accounts but also help you with household budgeting. There are also some companies that offer a discounted bundle of services or packages which can be cost-effective and reliable.

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.

 

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In order for small businesses to manage and run their business expenses smoothly, it is essential to keep tabs on your cash inflows and outflows. No question about it, the significance of proper expense administration for any magnitude of business is huge. The execution of the best businesses practices is a giant factor towards the revenue, growth, and, eventually, success and achievement of the business.

Bookkeeping is an excellent way for small and medium-sized businesses to manage their business expenses. The concept of bookkeeping cannot be stressed enough, be it in any kind of occupation or any kind of management. By efficiently handling and keeping tabs on business expenses, owners can gain a multitude of advantages:

Block Unseen Sinkholes

At times, your money is lost in places it should not be. By managing your business expenses well, you will easily be able to find those unseen sinkholes.

Maximize Income

By getting rid of wasteful expenditures and making the best use of items that are considered tax deductible, business owners have a chance to achieve a noteworthy aggregate of revenue.

Generate Prospects For Growth 

For businesses owners, it can be a huge deal if they are aware of where their money is being spent. Not just that, it also makes a big difference in finding out how effectively that money is being spent. These two aspects are a big factor in the preparation and accomplishment of future growth of the business.

In order to improve your business expense tracking technique, business owners should implement the below practices in their business:

Be Certain That Business Expense Policy Is Firm, Clear, And Fair

The business expense policy of your company needs to be well-founded, fair, and unambiguous. If there are any exceptions, they should be set aside for exceptional situations. The organization should make sure their managers, employees, and clients are familiar and well-aware of the policies set in place.

When formulating a business expense policy, the one thing that should remain a priority is ease of communication. After all, you don’t want your employees to go through the company textbook every time they have a question just to understand the business expense policy. The key here is simplicity.

Keep Your Business Expense Reporting Procedures Clear And Simple

Keeping the importance of simplicity in mind, we will further elaborate with the next point. When we talk of simplicity, it has its benefits and advantages. The first point is, the simpler you keep your business process and procedures, the more your employees will be able to comply. The more simplified the procedure is, the more your employees will stick to it.

Secondly, if the procedures are complex in nature, it will increase the chances of inaccuracy in managing the business expenses. The more administrative boxes and excel spreadsheets you have that need to be entered, the more chances there will be a blunder made somewhere. These are blunders that could possibly end in forfeiture of an expense entitlement.

Finally, and most significant of all, simplicity means speed and swiftness. If the system is simpler, your clients and employees will spend less time on the business operations.

Gather Relevant And Required Information For All Business Expenses

When it is time to file tax returns, the one factor that can immediately kill the likelihood of you getting your hands on any money is non-compliant invoices.

Whenever a reclaimable expenditure is incurred, the associated invoices and receipts will guarantee you of getting your money back. This is why it is extremely important to save those invoices and receipts so that they can be accepted for a tax refund by the appropriate taxation office.

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.

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The need for bookkeeping and accounting will never die. They are the two most basics needs and goals of every business, regardless of size, scale, or industry in which a retail business operates. Since businesses need to keep track of their income and expenses to improve their chances of increasing profitability, they need to implement sound bookkeeping and accounting practices to help their business grow in such a fierce environment. The slightest financial miscalculations or projections can cost significantly and can even kick a business out of the competitive race. For better financial decisions, businesses need to collect the necessary financial information as well as document and review their bookkeeping records accurately.

What Is Bookkeeping?

In simplest terms, bookkeeping is the process of recording business transactions as they occur, which means documenting daily transaction in an accounting system. It helps businesses track their finances, cash flow, income, and expenses and come up with a sound game plan to increase profits. In short, it reveals the financial status of the company that can further be matched against long-term intended goals.

Most small to medium-sized retail businesses prefer to do their own books as it saves money. However, the idea that hiring the expertise of professionals is costly is just a mere perception. There are many individuals and agencies who offer unique bookkeeping and accounting services at competitive rates. Therefore, it is recommended that small to medium-sized retail businesses search for professional, yet affordable, individuals or agencies who can help them achieve their intended financial outcomes.

The Use of Advanced Software in a Retail Setting

There is no denying the fact that advanced accounting software can be as helpful as hiring a professional accountant to do the job. For a small to medium-sized retail business looking to maintain and manage its accounting in-house, accounting software is one of the most convenient and cost-effective ways to record, handle, and manage important business books and financial records. Some accounting software used in retail businesses can be purchased for $300-$800 dollars. Businesses can even buy monthly subscriptions to record transactions, manage their payroll, sales, inventory tracking and have a clear picture of their finances.

Why Is Accurate Record Keeping the First Step towards Success?

As someone rightly said, accurate financial records lead a business to make ideal assumptions and wise decisions. Whether you are using a credible accounting software or not, you must always keep backup of important financial documents like receipts, sales records, bank statements, loan status, past tax data, etc. A tangible file and hard copy of financial records as well as bills and invoices need to be maintained properly to handle situations such as data loss.

According to accounting veterans, it is ideal to plan for the worst scenario to happen to your business. The records of a retail business need to be backed up properly in order to avoid problems that miserably drag you into a severe financial crisis.

Accounting Expertise

Hiring someone with the proper accounting knowledge and skills can help you reduce your tax season troubles and save you a lot of money and time. For retail businesses that consider investing in accounting services as troublesome and expensive, the investment made on hiring an expert will always pay off in the long run, with accurate results. 

It is important to remember that acquiring an accounting service tailored to your business needs can be extremely helpful to your business in many ways. You can leverage more control over your company by concentrating more on core affairs of running your business and allow your accountant to ensure accounting and financial data is handled properly.

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.

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A chart of accounts for a small business is basically an index of all of the accounts where the financial information of the company is kept. Account names and numbers where the financial transactions of a company are recorded so it is imperative to set it up before you start composing the general ledger. Setting up a chart should be the number one priority for a new business that is setting up it’s bookkeeping system. Depending on the scale of your business, items are included in the chart of accounts. An inventory account is a must have for a manufacturing business, however, it will not be used for a service-based business.

When setting up an accounts chart, you must think long term. Think of any possible scenarios that could happen 5 years down the road. As you go along, you will have to add new accounts to the chart because the number of employees and scale of your business eventually increases. Making up the accounts chart requires you to assign a block of numbers to each account and leave blank spaces for the ones to be added on later. Below are some of the categories that may be included in the chart.

Categories for Chart of Accounts

  • Assets
  • Liabilities
  • Equity
  • Revenue
  • Expenses

Assets

The accounts chart must be formatted similarly to the format of your balance sheet so that it is easy to interpret. This account will list all of the assets that your company owns, starting from current assets and moving on to the fixed ones. The asset account is generally given the number 1000, which moves on in a sequence for other accounts. Your current asset account would include all the cash and receivables that are owned by you. Also, if you have an inventory, that would be included in an inventory chart of accounts. 

Fixed asset accounts are adjusted similarly and, after that is done, you need to account for depreciation. Your fixed assets will always go through accumulated depreciation and it will always be shown as negative. Buildings, vehicles, and machinery all go through depreciation for which they must be accounted for.

Liabilities

The liabilities of your company shows your debt obligations and what you owe or may owe in the future. Just like assets, follow the same pattern for liabilities as it is followed in the balance sheet. There is a chart of accounts for a current liabilities section and a long-term liabilities section. Short-term debt accounts are included in the current liabilities section. Accrual accounts are also included in the liabilities that contain payroll taxes and accrued wages. Long-term debts such as mortgages are also recorded in the liabilities.

Equity

The equity account entails all of the investments made in the business. If you are the sole owner of the business, the chart of accounts for equity would only include your share. However, if you plan to bring in other investors, the chart would require you to account for the common and preferred stocks separately. Retained earnings and gross profit accounts are also included in this section. The accounts are generally started with the block sequence 3000, 3010, and so on.

Revenue

The revenue account would be on the same pattern as the income statement. You will have to account for sales revenue, which is the main source of income for your business. Sales allowances and discounts should also be included along with sales revenue so that you have a clear picture in front of you and all the discrepancies can be accounted for easily.

Cost of goods sold is another important item in the chart of accounts for revenue. Your bookkeeping needs require you to cater to all of the sales costs, supplier discounts and other costs related to shipping.

Expenses

This is the last category of the chart and often starts with 5000. The best way to input your expenses is by adhering to the internal revenue service tax form, which can be found online. This will make the work a whole lot easier when it is the end of the year and you have to file tax returns. Develop a separate chart of accounts for all expenses listed in the form in addition to any other expenses that are specific to your firm. Blank spaces should always be left for currently unaccounted expenses.

Conclusion

Following these guidelines will ensure that your chart of accounts is ready for interpretation and is in correlation with both your balance sheet and income statement.

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Regardless of the nature of a business, the most vital requirement in running a business is to handle the various bookkeeping tasks effectively. Improper or incorrect recording of business activities will be disastrous for any business. The first issue in incorrect invoicing is that the business operations will be incorrectly recorded. It could cause delays in getting funds for different projects.

Incorrect or unsystematic business records can also make it challenging to file your taxes or even land you in hot water with the Internal Revenue Service. Using QuickBooks to keep your financial records lets the company evade those possible glitches in management.

QuickBooks has almost every feature of other software, with a few additional attractive features designed according to the needs of businesses. The software has multiple versions that are tailor made for the business according to the industry they operate in. Businesses will have options of industries to choose from, such as:

  • General Business
  • General Contracting
  • Non-Profit Organizations
  • Professional Services
  • Retail industry

Why Does a Company Need QuickBooks?

Easy to Use

The main issue with bookkeeping programs is that many of these programs are hard to use and difficult to maintain. QuickBooks, on the other hand, is intended to be instinctive and easy to comprehend, even for businesses that lack the necessary accounting or financial information about the company for bookkeeping.

Ability to Work with Other Programs

The capacity of the software to incorporate with other programs is a huge benefit of QuickBooks. After using the product to take account of all the expenses and income generated by sales, the senior management of the company can easily export that data for filing taxes effectively. QuickBooks also has the capacity to integrate Microsoft Excel for all of the necessary data from different sources for useful bookkeeping.  

Customization Options

QuickBooks offers different ready-to-use templates for businesses to use for generating invoices, business plans, charts, and spreadsheets. It also makes it easier for the QuickBooks application to customize the feel and theme of the documents for bookkeeping. The customization option gives the users a different approach to change their invoices according to the needs of the business. The ability of QuickBooks can help business owners in organizing their information about business activities and each activity is recorded separately. 

Signing Checks is Easier with QuickBooks

Businesses are required to sign several checks every day for different needs and activities. Using QuickBooks makes it easier for business owners to write checks for various expenses. QuickBooks has an automated process that saves time and generates signature checks by a simple and easy to use method for bookkeeping.

Extensive User Base

QuickBooks has an extensive user base; the product is popular around the world and many experts have frequently tested the software. The extensive user base indicates that QuickBooks is very useful and reliable. QuickBooks has features that makes it cost effective for companies to use this software. The market does not have a similar product that can match the extensiveness of QuickBooks for bookkeeping.

QuickBooks is compatible with other applications that makes it easier to export and import data from QuickBooks. This solution is ideal for small businesses who cannot afford to have multiple applications. They can simply import data from an excel sheet to generate online invoices. The premier edition has features that enables the company to have their own customized software that is according to the specification of an industry. For example, QuickBooks for a hospital will be significantly different from QuickBooks for an engineering company.

Multi-Monitor Support

QuickBooks allows their certified customers to take care of their business activities in a very effective way. It allows three users to use the application by using a single license purchase. Using the multi-monitor support, a business can manage the list of its customers on one screen while it can track the invoice and payments coming from the customer on the other two screens.

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.

 

 

 

 

 

 

 

 

Rear view at two businessmen analyzing stats financial data on pc laptop, pointing at screen with rising graph and charts, discussing company growth, using easy accounting software for small business
Small business owners face the job of making sure that all of their accounting procedures are conducted as efficiently and accurately as possible. On the whole, company owners have to make a choice between a manual accounting method or accounting software programs. An accounting software system has many major advantages towards achieving faster growth in a company. More and more companies are choosing to use this method for the following reasons.

  1. Time Saving

One of the most important advantages provided by computerized accounting software is that it can save huge amounts of time for small business owners. They can easily make calculations for operations such as billing and payroll performed efficiently and quickly just by using accounting software programs intended for small businesses. They can also have access to their accounting records swiftly without having to go through huge files of paper. Businesses can give more time to their customers and focus more on their marketing functions which will help their business grow further.

  1. Reduced Errors

Manually “number crunching” presents opportunity for human error. This error can be costly for any small company owner who happens to be in a rush to finish an accounting task. Calculation errors can occur due to inaccurate inventory counts, incorrect total sales receipts, along with many other reasons.

With the help of computerized accounting programs and software, there is a drastic reduction in calculation errors. If you have accurate accounting information, it will also help you escape any tax blunders that could possibly lead to complications and difficulties with the Internal Revenue Service.

  1. Centralization

Using an accounting software in a business helps centralize and unify many aspects of the business’s financial management. A small business owner will easily be able to undertake tasks such as payroll, invoicing, inventory management, and some sides of customer relationship management, all from an accounting software program. A business owner will save money and time because of centralization as long as the owner does not need to buy separate software programs in order to perform operations such as invoicing customers.

  1. Makes Tax Compliance Straightforward and Easier

Besides presenting the amount of tax that is to be paid on particular invoices, accounting software also aids the business owner in preparing reports. An example of this scenario can be the amount of a particular tax the business owner has been paying during the course of a certain period. Also, accounting software makes it a lot easier to collect the information needed to complete and apply for essential government tax forms.

  1. Provides Tools for Analysis

If a business owner uses an accounting software, it will be just like having their own in-house financial consultant. The customizable reports will allow the owner to analyze and examine various aspects of the business as well as provide the information and statistics needed to make better and more informed financial judgments. Reports, such as a balance sheet, help summarize exactly just how well the business is doing.

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.

 

Businessman shows concept hologram Save money on his hand. Man in business suit with future technology screen and modern cosmic background
There is no denying the fact that cutting business expenses and controlling costs has become extremely challenging in today’s business environment. Modern trends indicate that companies need to reduce their expenses to effectively achieve their business goals and objectives. However, establishing control over your business and finances requires a large amount of motivation, knowledge, skills, and expertise. Why? Because only a clear-cut strategy and well laid-out plan can make cutting down your monthly expenses hassle-free.

Cutting business expenses? Not a problem!

Moreover, reduction in business expenses and an increase in revenue can have a big impact on a company’s profitability and are two ways by which companies can maximize their profitability index. According to industry experts, increasing sales and revenue is hard because it requires a lot of planning and strategy. It takes time and effort to come up with a brilliant execution plan. On the contrary, cutting business expenses is something that can be done easily, without much stress. All that it takes is a little bit of your time. Moreover, it is important to review your bookkeeping and accounting records to establish a clear picture of your company’s standing prior to making any solid decisions regarding controlling your costs.

Reduce Supply Expenses

If you expect to reduce supply expenses, you need to look outside of your pool of traditional vendors. Look for the vendors, manufacturers, or suppliers who can offer you the best price as large discounts help you cut business expenses and costs. Bulk purchasing is ideal in each and every sense. Always seek multiple bids to get ideal rates and never make a long-term contract for supplies with a single party or vendor as saving can have a big impact on your bottom line.

Lower Financial Expenses

Hiring an in-house accounting or auditing professional can be a costly decision. That’s why most businesses rely on external accounting agencies or individuals who offer competitive rates for their services. Cutting back on your business expenses means saving money on insurance and additional bills. To meet financial emergencies and consider a business expansion, you need to regularly contribute to your savings account. Lastly, don’t take on unnecessary debt to make ends meet because you may eventually find it hard to pay back the money you borrowed from the bank with interest. Prior to making such decisions, you must do a thorough cost-benefit analysis and future forecasting.

Take Advantage of Social Media Marketing

Traditional marketing can cost you a fortune. This indicates that you need to look at some cheaper alternatives like social media marketing such as Facebook, Twitter, and other similar dynamic platforms. You can build your customer base there, as studies have revealed that social media marketing is more effective than traditional marketing on the mainstream media, ultimately reducing your business expenses.

Try To Achieve Economies of Scale

By maximizing your productivity in manufacturing, you can expect to take your expenses to a minimum level. Improved R&D and market knowledge will help you achieve economies of scale, which is ideal for maximizing your profitability.

Review Your Finances and Business Books Quarterly

To get a clear picture of your finances and business condition, you need to review, maintain. and manage your business books, if not on monthly basis, then quarterly. Moreover, to cut business expenses, you need to audit your monthly subscription billing. Switch to the software applications or talent that are worth your investment and money.

Look For Affordable And Suitable Office Alternatives

You can always consider relocating your office to a more affordable area to cut business costs. Often times, in the age of digitalization, companies don’t need to have their office located in prime, expensive locations. You can move your office to a convenient location that offers affordable rates to reduce commercial rents.

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.