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Accounting software has made bookkeeping and finances easier than ever. With a cluster of options to choose from, the software may be used to perform almost each and every one of the complex bookkeeping tasks that were once handled manually. Moreover, the bank auto connect option enables one to import their bank statements into the accounting software of your choice. This option allows for all bank transactions to be updated automatically in bookkeeping records. However, there are exceptions to this import functionality and a few are discussed in the paragraphs that follow.

Access Denied

Despite a company choosing to use accounting software to ease the burden of keeping track of business finances, there may be restrictions imposed on access to transactions by their bank. For instance, integration of the software with the bank’s internal system may not be allowed. Moreover, the bank could refuse access to any and all business bank transactions to the software. In such a case, importing bank statements into an accounting software is likely to fail. This might as well be a safeguard or internal control implemented by the bank’s management in order to ensure secure access and security against vulnerable accounting software.

Format Unsupported

Another reason for import failure may be attributed to formatting issues that have become a serious matter worth contemplating recently. The data could be in such a format that the accounting software cannot easily import it. Depending on whether the software has a potency for adjusting to every data format, this may impede the seamless process of importing bank statements into accounting software. Therefore, it is essential that the software supports the type of format that the data entails to allow import. In addition to this, the software may not support importing bank statements for data that may be older than a few weeks. An alternate importing mechanism may have to be installed in order to do so.

Connectivity Issues

When importing bank statements into accounting software, the connection may not be supported at all times from every remote location. Since banks have implemented internal controls for safety purposes, connectivity of the software with the bank could be an issue. Imagine what could happen if accessing information from the bank was this easy. Therefore, the connection may be allowed for a limited amount of time and only at certain times, per the terms and regulations agreed upon with the bank.

Tax Separation

Another reason why importing bank statements into accounting software may fail is that the particular software is not capable of separating the tax on purchases from the transactions. Tax calculations is an essential matter for many businesses and these must be bifurcated individually in order to estimate the total tax figure. Owing to variable tax rates on different products, these taxes may not be separated out as intended or with complete accuracy. 

Dubious Accuracy

One of the most crucial issues relates to the accuracy of categorization of data. Accounting software can input data with perfection. However, categorization of each transaction is not a possibility unless a criterion for each accounting element and its class has been defined in the software. Without these, the classification of data from the bank statement may be a dubious representation by the software. Moreover, bank statements tend to provide a limited amount of information such as date, amount, and information regarding the supplier. Details are usually not recorded on statements which makes this classification even more skeptical.

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.

 

 

 

 

 

Printed on the seal of approval documents
There are many reasons that can lead to applying for a bank loan such as buying a car, renovating a house, or going to college. Banks aren’t, however, handing out money to every borrower that comes their way as they have to ensure that the loan is repaid in full. Therefore, anyone applying for a loan must do adequate research about the terms and conditions required by the bank for its approval.

Requirements for a Bank Loan

Before you apply for a loan, you need to understand certain factors that are considered important by ta bank or lender. There are many aspects of a business or individual that are looked into by the bank. However, the following factors are the most relied upon.

  • Credit score and credit history
  • Income or revenues if it’s a business
  • Any outstanding debt
  • Assets in hand
  • Purpose of acquiring the loan

The credit score is one of the most significant factors for a bank to measure the credibility of an individual or business. A well-maintained credit score shows that the person has made responsible financial choices, which basically reduces the risk of defaulting on a bank loan. Surveys indicate that approximately 60% of the people who were approved for a personal loan had a very good credit score.

Apart from having a good credit score, there are many other requirements from a bank. Banks generally have stringent requirements compared to other lending options. Here are a few tips, which can greatly increase your chances of approval from a bank.

Pay Off Previous Debt

Holding on to a large amount of debt can seriously hurt your chances of scoring a bank loan. Banks look at your debt level in terms of debt to income ratio, which signifies the amount of income that goes into paying off the debt each month. For a mortgage, the maximum debt-income allowed limit is 43%. For another kind of personal loan, you may have a bit more leverage. However, the point is that any unpaid loans hamper your chances of scoring a new one. The best course of action should be to pay off your previous loans before applying for a new one, as you will have a better chance of being approved.

Check your Credit Score

You probably won’t want to hear your bank tell you that your loan has been denied because you have a low credit score or there are anomalies in your credit report. Therefore, it is vital to check your credit report before applying for a loan. There are ways to fix your credit report if there are any issues and the best way to fix them is by seeking professional help. However, simple things like keeping older credit card accounts open and loans that have been paid in full are a great way of building up your credit score. If you detect any error in the report, reach out to the credit bureau as soon as possible and file a dispute so that it can be quickly corrected.

Ask Only for the Amount that you Need

One of the worst mistakes you can make is applying for a loan bigger than what you actually require. A bank will ask you for the purpose of acquiring the loan and they will also estimate the costs that are incurred for the specific purpose. A large discrepancy will put them in doubt of your credibility. This will eventually increase the riskiness of giving away the bank loan, which can end badly for your cause.

Another reason for stating the needed amount is that you will have to repay it all with interest. A larger amount will mean that the interest payments will also be greater. Therefore, by all means, it is not such a bright idea to ask for more than you need.

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.

 

 

 

 

 

 

 

Girl in white full of doubts and hesitation. Girl and question marks above her head. Young slim woman.
Keeping your books is not just about preparing for tax filing or tax savings; there is a lot more to it. A lot of critical decisions about the business are made based on the information offered in financial statements. Some might consider bookkeeping to be something that can be done by anyone. However, maintaining accurate records of business financials is not an ordinary task and requires skills and expertise. Businesses outsource professional accounting and bookkeeping services for this job because they consider it important and understand the significance of doing it right. Here are some of the reasons why business accounting tasks should be taken seriously.

Corporate Veil and Bookkeeping

The corporate veil is a legal concept that separates a corporation from its shareholders and protects them from being personally liable to company debts and obligations. When you maintain separate books for each subsidiary of the business, it demonstrates that you have recognized it as a separate entity and, therefore, everything related to the entity is a business of its own. Also, when you keep your personal and business finances separate, it makes it easier for you and the auditors to accurately measure the business performance.

Cutting Corners

Unfortunately, this is an approach that many new business owners opt for and it inexorably comes back to bite them. Accurate bookkeeping is indispensable for tracing the growth of your business and legal/tax purposes. Legal business demands you to maintain an accurate measure of cash flows, expenses, labor costs, and revenues. Cutting corners to save time and money must not be an option and should be avoided at all costs.

Audit and Tax Protection

Every business, whether big or small, has to go through IRS auditing. This can be really bad for you if your books are not well maintained. Discrepancies in financial records will be noted by the audit team and you can face potential charges from the IRS. These charges can result in you paying heavy penalties or fines and, in some cases, even lead to the closure of your business. This is certainly a situation that must be avoided. Appropriate bookkeeping is the only way to avoid such scenarios. 

The amount of taxes that you have to pay depends on the revenues generated by your business. Professional accounting procedures ensure that you pay payroll taxes as well as prepare the documentation for filing your taxes on time. If you have maintained your books properly, you can search for legal ways to reduce the tax burden, which is quite possible given you understand accounting practices. If you are not adept at accounting, it is recommended to hire a professional to assist you with this task.

Bookkeeping Leads to Improved Decision Making

The success of any business depends on its ability to interpret the given information accurately and make informed decisions based on the provided knowledge. The best source of information for any business is its financial records which include expense tracking, budgeting, income statements and sale reports. Any inaccuracy in these records will mean that your decisions are based on imprecise information and that can have disastrous consequences. Whether you are handling the bookkeeping needs internally or have outsourced the job, you must ensure that the highest standards are followed in their compilation. As a business owner or manager, it is your duty to find someone who is capable enough to perform this important task for you.

Automating the Process

The evolution of technology has simplified most tasks that were thought to be complicated just a few short years ago. Using automated bookkeeping services, such as QuickBooks, automates most of the tasks that were previously handled manually. This means that the tasks are completed efficiently with less resources than previously required. You will notice a significant fall in costs related to bookkeeping. You won’t have to spend surplus payroll money on a full-time staff bookkeeper to handle the job, as the automated software will:

  • Keep essential information at your fingertips
  • Efficient use of online banking
  • Better collection of receivables
  • Track real-time receipts and invoices
  • Give you access to financial information on the go

In conclusion, don’t be naïve and laid back about managing your books. Take charge of your business with the help of these vital tips.

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.

 

 

 

 

 

 

 

 

 

Leadership Concepts on Touch Screen
Whether big or small, every company is constantly fretful about handling money. For new businesses, this is even more imperative, as managing start-up finances is crucial to enduring a capricious economy and competition. Particularly, entrepreneurial ventures need to exercise cautiousness with their financial decisions from their incubation. Every business desires a financial structure that engenders profit to maintain their credibility. Entrepreneurs must equip themselves with good money management skills to ensure the success of their venture.

Not all businesses, however, are adroit at controlling start-up finances. This doesn’t mean that you should do nothing about it. Here are a few useful steps that will offer you a good direction to start with.

Educate Yourself on Managing Start-Up Finances

Not every business owner has a firm understanding of basic financial concepts. Many are unaware of the basic bookkeeping rules and lack knowledge about various key aspects. Even if you are planning to hire an accountant, it is imperative to educate yourself on certain basic accounting principles. The long-term success of your business depends on your ability to understand the financial structure of your business because you will have to rely on it for making key business decisions.

Financial statements encompass 4 vital details – balance sheet, profit and loss statement, cash flow statement, and statement of shareholders’ equity. The cash flow statement scrutinizes operational undertakings, investments, and other start-up finances. The balance sheet delivers evidence related to the business assets, liabilities and shareholder’s equity. The profit and loss statement reveals the grossed revenue for a financial cycle. Shareholder’s equity signifies the quantity by which the business is funded through common and preferred shares.

Getting yourself acquainted with such information will be vital for your future endeavors as a business owner.

Plan for Growth

Failure to make a user-friendly product is one of the major reasons of failure for new start ups. However, as an entrepreneur, you are faced with numerous challenges that can be hazardous for your business. As a new business, your focus should be on the target market and every other aspect of the business should be aligned towards your customers. This is the only way you are going to sustain a business.

Your start-up finances should follow a specific plan designed for growth of your company. To secure your venture capital and be eligible for funds, you need to show fast-tracked growth. Otherwise, you will lag far behind in the race. New businesses can run out of funds if the growth stalls in no time as they are unable to sustain losses for a longer duration of time.

Watch the Cash Flow

Managing your start-up finances demands you to establish a financial control that provides your business with a solid foundation. Key internal controls include bookkeeping, auditing, damage control planning and cash flows. These controls are necessary to ensure that your business stays on course in developing SOP’s and manages its cash situation, even in tough times.

At all times you will need to vigorously monitor the cash situation and readjust your forecasts according to the current scenario. This requires setting up maximum purchase limits for everyone so that your business does not run out of cash at a critical time. You will need to oblige all expenses to be recorded on invoices to support audits as well as maintain positive cash flows. Start-up finances should also take inventory management into account, as your chosen method of recording it will have a significant impact on your taxes. If you are filing taxes for the first time, inventory and payroll taxes are two things you need to be concerned about the most.

Evaluate your Achievements

Key Performance Indicators (KPIs) are techniques to measure a company’s triumph in accomplishing business goals. You must create KPIs across multiple departments so that performance can be accurately measured individually.

You should ensure smart KPIs that are Precise, Assessable, Realistic, Pertinent and Well-timed. Goals that are too broad don’t usually have an end date and aren’t within your control. Thus, they are doomed to fail. Start-up finances should be used efficiently to align with the core objectives of your business and eventually help in long-term 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.

 

 

 

 

 

 

 

 

Young asian businessman carrying heavy box of TAX. Taxation concept
Remember the old saying ‘when pigs fly’? You may have heard your parents mumbling this phrase in response to your allowance increase request. You may also recall it when you saw a casual, unwanted email promising your business 1000 new clients. And, you have possibly even said it when someone recommended that you improve your bookkeeping habits in your business.

You might consider tax preparation a part-time job. However, the key to refining your tax season experience is continuous preparation for the entire year, not just at the time of filing. Developing healthy financial habits should be engraved in the entire culture of your organization. Someone who has suffered from a heavy tax burden would surely understand that ignoring financial responsibilities always results in misery. Bruises may still hurt but they remind you to embrace clever accounting habits, which will ensure the success of your business.   

Get Rid of Outdated Accounting Systems

If you have been struggling to manage a chaos of sales receipts, invoices, and financial reports, you definitely need to redefine your bookkeeping model from scratch. Cloud-based accounting software offers a realistic solution as they allow you to generate, send, and receive receipts and reports in real-time. You can also synchronize the software with your bank account to send or receive payments. All of this is possible remotely, from anywhere. Developing healthy accounting habits should always be a top priority.

As these cloud-based platforms have easy accessibility and functionality, your business will habitually adapt and develop healthy accounting practices that are key to surviving the tax season.

Develop Contemporary Accounting Habits

Most top businesses today have invested in developing a sagacity among their employees that allows them to stay current and engaged. Staying in touch with the latest laws and tax changes is crucial for any business and it is important that you know about them in time so that something could be done before it is too late. The latest tax reforms are a contemporary example, which need to be thoroughly investigated by a team of seasoned professionals. Though you might be outsourcing your business bookkeeping, you should still put an effort into learning about the changes so that you can comprehend things clearly.

Developing contemporary accounting habits also means that you stop procrastinating and start categorizing your expenses on a weekly basis. Leaving things on the back burner only cause them to add up and, when it’s time to file taxes, the situation becomes a fire drill for your whole team. Keeping a regular and consistent record of all of your financials will ensure that you avoid any such situation.

Separate Personal and Business Expenses

Using your business account for personal use is never a good idea. The expenses will continue rising without you noticing and eventually they will add up to your tax bill. You may not consider it a big deal and think of it as a onetime thing. However, over the course of a year, the expenses may accrue to be substantial. This is one of the worst accounting habits you can adopt.

When you use business debit and credit cards only, it will create a paper trail for bank reconciliation which will eradicate the reimbursement process altogether. Don’t stop with only reconciling your bank accounts. All accounts that have an ending balance must be reconciled. Your bank accounts, loans, lines of credit, credit cards and payroll liabilities must all be reconciled on a daily or weekly basis and shouldn’t wait until the end of a month.

Have your Books Reviewed by a Professional

You may consider hiring a CPA an expensive and insignificant endeavor. However, that decision can prove to be one of the most valuable accounting habits that saves you from a hefty tax burden. Just because your books are reconciled, it doesn’t prove that they are also accurate. Having another set of eyes looking at your financials won’t hurt you. Instead, a CPA will offer critical input which could reduce your tax bill considerably. Because these are professionals who have the experience of looking at thousands of financials, they will surely catch any ambiguities and can offer you valuable advice to manage your taxes in the future.

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.

Young and creative team discussing ideas in board room. Group of multi ethnic people during business meeting.
It is a fact that we learn from our surroundings and, let’s face it, for a large part of our day, we are surrounded by those we work with. Thankfully, we can learn a lot from our colleagues as they are all from different backgrounds and have different life experiences.

When we talk about household finances, some are better at managing their income, while others really struggle with making sure they efficiently meet all of their financial obligations. What we learn from different people are the techniques of managing various things about life in general. This includes managing our household finances.

How Can Our Colleagues Help With Our Household Budget?

 

1. They Can Help Us Make A Budget

In order to keep our spending in check, we all know that we need to have a budget stating all of our expenses and income. Many times, our colleagues can help us make a list that is easy to maintain and understand. They can give us an outsiders perspective from someone you trust but is not too close to it all. We can also take a look at how they have done their budget and get inspiration from the one that seems the easiest to us.

2. They Can Give Us Financial Advice

We know that saving money or part of your income (most suggest 10%) is important and what’s more important is investing that money rather than leaving it idle. We can talk to our colleagues and discuss the different investing options that are available as well as which option they have chosen for themselves. This way, we will have a better idea of which option is more lucrative and less complicated as different people will be comfortable with investing terms that match their criteria. This will save us the cost of hiring a fund manager who would advise and manage our money and household finances.

3. They Can Help Us Look For Additional Income

Along with investing the money you save, it is wise to look for other sources of income rather than just be dependent on one stream of income. You can ask your colleagues what their additional sources are and how they have gone about initiating them. This could mean looking for part time job options or jobs that you can do from home to earn a few extra bucks.

4. They Can Guide Us On How To Deal With Family

Efficiently managing your household finances without the help and unity of all of your family members is nearly impossible. The entire household needs to be on the same page. Once you realize the importance of managing your money, you can ask your colleagues how they educated their family members about the efficient management of household finances. It is true that you may face a little resistance from your family at the beginning, but by using tried and tested methods of your colleagues, you can convince them to follow the plan for the betterment of the family unit.

5. They Can Become Our Partners

The number of people choosing to start their own business is on the rise. This fact could be an encouragement for you to begin a little setup of your own. By doing this, you will be your own boss and have an additional stream of income. However, along with a job, you may find it difficult to manage a business on your own. In such a case, you can partner up with a colleague or two of your own. This can lead to the success of your business as you will already be familiar with working with your colleagues, meaning less chances of a clash.

Conclusion

Our learning doesn’t end here; we as human beings are in a constant phase of learning. We especially learn and adopt things from the people who we are around the most. This includes our family, friends, and colleagues.

Many of our colleagues are from the same mindset as we are, we can learn a lot from them about managing our household finances. The above mentioned 5 points are a few ways through which we can learn different things about household finances from our colleagues. The better we are at managing our income and expenses, the easier our lives will become.

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.

CASH FLOW CONCEPT
For any business or company, a cash flow statement happens to be one of the biggest and essential financial statements. The statement might be easy and uncomplicated as a one-page analysis statement or might consist of quite a bit of schedules that feed the figures in a central statement.

A cash flow statement is like a record of all of the cash flows in and out of a project or business. Think of it just like the checking account at your bank. The deposits are like the cash inflow and the withdrawals (in the form of checks) are like cash outflows. Your checking account’s balance is like your net cash flow for a certain period of time.

Just as bookkeeping helps in providing all of the necessary and relevant information from which all of the accounts are formulated. Every transaction, whatever its nature (purchase or sale) is, should be recorded.

A forecast of future cash flows is known as a cash flow budget. Think of it just like a forecast of your future withdrawals and deposits in your checking account. A cash flow statement is not only related to the total amount of cash flows, but also to the timing of those flows.

Most of the cash flows are formed with many time periods. It may possibly take over a time period of a year to register monthly cash outflows and inflows. Not only is the remaining cash balance projected at the year end, but also each month’s cash balance.

What Is the Purpose of a Cash Flow Statement Analysis?

The objective of a cash flow statement is to see where the cash inflows are being generated and where the cash outflows are being spent for a certain period of time (generally annually and quarterly). The purpose of a cash flow statement is essential for analyzing long-term solvency and liquidity of a company.

The cash flow statement involves the usage of cash basis accounting as opposed to accrual basis accounting. The majority of businesses use it for their income statement and balance sheet. This is essential for the reason that a corporation might have accumulated accounting revenues but not actually have received the cash. A cash flow statement analysis can produce taxes payable and profits but not offer the means to stay secure and creditworthy.

A cash flow statement’s purpose is to deliver the information on a company’s solvency or liquidity.  The cash flow delivers a clear picture of a business’s financial resources for a certain point in time.

What Are the Cash Flow Statement Components?

A cash flow statement component gives a comprehensive vision of cash flow from financing operations and investing.

  1. Finance Activities

The cash flows from the finance activities refer to the cash outflows towards the entities investors (such as paying interest to bondholders) and shareholders (such as paying stock buybacks and dividends). Cash flows from the finance activities also include cash inflows received through the disbursement of stock equity or through sales of bonds.

Many of the cash flow finance activities comprise of cash outflows because most entities only provide stocks and bonds occasionally.

  1. Operating Activities

The remaining sum of cash leaving or coming in through the daily business operations is known as cash flow from operations. It consists of the operating income along with non-cash items, for instance, depreciation added.

  1. Investing Activities

Cash flow through investing activities will consist of cash outflow for long-term assets like equipment, land, buildings, etc., as well as inflows from the sale of securities, assets, businesses, etc.

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.

 

A standard calculator on top of a bank statement.
Bank reconciliation predominantly refers to matching your records against the bank registers. A monthly reconciliation ensures that you are aware of any sporadic transactions, which may take place without your consent. The best way to reconcile the accounts is by going through each record individually and matching it with your bank statement. This ensures that you have not missed anything and everything has been accounted for. You may see minor differences in the ending balances due to certain outstanding checks or other reasons. Therefore, take them into consideration so that you do not see them as errors.

Why Bank Reconciliation is Important

Reconciling your bank accounts regularly keeps you out of trouble in many ways. You are able to identify the problems before it is too late as you are constantly monitoring cash flows. It is thought that business accounts do not have the same amount of protection that consumer accounts do. Therefore, you are advised to keep a close eye on these accounts yourself. Here are some reasons that may persuade you to consider reconciliation from time to time.

Catch Fraudulent Activities

One of the key purposes of reconciling your accounts is to catch potential frauds. If you have issued any checks that were legitimate, you need to ensure that they are used exactly as you thought they were to be used and that there are no duplications or alterations. If there has been unauthorized access to your account, you need to know before something really harms you.

Prevent Complications

The bank reconciliation process is also useful in identifying any potential hazards or problems in time. Sometimes, your cash flows are really down or you are having trouble recovering the accounts receivables. In such situations, reconciling everything can guide you in the right direction by identifying the problem source. Once the problem is identified, you can take measures to fix it and, along with that, fix your cash flows and receivables. It also helps you develop a bookkeeping system that is free of errors and more efficient.

Along with assisting you in identifying the balances in all of your accounts, bank reconciliation helps you to avoid bank fees due to insufficient funds and saves you from opening too many lines of credit when you don’t actually need them. You are able to keep track of outstanding checks and see if any payments by your customers have bounced.

When Should You Reconcile?

There is no fixed time to reconcile your bank accounts as you can do it anytime you want, depending on your preference. However, it is recommended to reconcile all of your accounts at least once a month so that you have an accurate picture of your current standing as a business or individual. Some high volume businesses even reconcile on a weekly basis as they are involved in many transactions daily and it can really pile up if they wait an entire month.

You can also use Positive Pay for bank reconciliation. This means that any payment in or out of your account has to be notified to them in advance. This helps save you from any fraudulent activities. 

How to Reconcile

It does not really matter whether you take a formal or informal approach to reconciliation as the main purpose is to match each transaction with your accounts balances. You will have to closely inspect your own records as well as the bank records and compare the balances at the end of a self-defined accounting period.

Your bookkeeping system is important in this regard because, if it’s properly managed, you will be able to match everything without much hindrance. However, bank reconciliation can turn into an arduous task if you do not have a well-maintained accounting system. Automating and integrating your accounting system with the bank can ease the whole process as you can have access to updated records at all times.

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.

World philosophy day concept with tree of knowledge planting on opening old big book in library full with textbook, stack piles of text archive and blur aisle of bookshelves in school study class room
Financial literacy is defined as combining financial knowledge with attitudes, skills, and behaviors, which are important in order to make a financial decision based on personal circumstances. It helps improve your financial well-being. Undoubtedly, being financially literate will assist in influencing financial decisions. The ability to make financial decisions and improve financial well-being are two confusing aspects according to the definition of financial literacy.  

Concepts defining financial literacy have failed to highlight the financial issues associated with the complex financial environment. According to the definition of financial literacy, anyone can be considered financially illiterate for not having enough skills or knowledge regarding finances. Researchers have anticipated that people who have low incomes carry the same behaviors, biases, weaknesses, and attitudes compared to those suffering from personal and stressful situations.

It has also been observed that being financially literate becomes very hard for people living in poverty to change their financial conditions. In addition, financial assets may affect people who earn less adversely as it falls into the ‘bank fee poverty trap’. This is mainly because they do not own any mortgages or they have minimum bank balances to give up.

Problems with the Concept of ‘Financial Literacy’

Culture

Following certain cultures will enable individuals to become financially literate. Financial literacy lacks in determining how others are affected when an individual makes a financial decision. For example, supporting a local store that will open opportunities for employment by creating ample benefits specifically for the community. Whereas shopping online is more likely to be a great financial decision, but it will create adverse effects on those who are running physical stores. It is important to highlight influences of financial decision making and how others are affected according to the definition of financial literacy. It includes cultural and personal values, socioeconomic status, life stages, professional associations, educational level, media, and much more.

Financial Dilemmas

Financial literacy is an individual’s capacity to gain more knowledge by reflecting on critical consequences of financial decisions. These are referred to as “financial dilemmas” which include stressful situations such as sudden expenses or unemployment. It has also been observed that people with low income turn out to be the “best budgeters”. It is mainly due to the implementation of their practiced survival skills. For instance, if there is an option to either pay rent or feed the family, then an individual’s financial decision may be conflicted. It is not a “lack of financial literacy” that affects decisions, instead low income families have a strong hold over there financial matters. It is necessary to expose financial limitations, as it will allow implementing concepts of financial literacy per the original context.

Education

Another main issue related to financial literacy is that only 17 states are providing financial education. It is necessary for schools to give important life lessons pertaining to financial skills to youngsters. This will help them to monetize labor and  manage their assets efficiently. There is a definite need for programs comprised of financial literacy skills to be offered to students so that they will learn how to manage and implement their finances appropriately.

Financial Literacy is a Collective Problem

Issues related to financial literacy are not associated with only one individual. It is a collective problem of the whole nation as it has a direct effect on the younger generation. It is important for our nation to make plans on how to implement the concept of financial literacy in the best possible manner. Governments should allocate funds for proper training programs that will create awareness regarding financial management. It is necessary to impart financial literacy onto young adults as it will allow them to make better financial decisions and manage their finances more eloquently.

‘Increasing financial literacy isn’t just in the best interest of individuals, we all benefit from a more literate population.’ (Guest, 2017)

Addressing problems associated with financial literacy will help our nation to grow in terms of improving the lifestyles of our citizens. This can only be possible if financial literacy is integrated in the manner it should be. Governments should consider ways to improve financial issues by initiating awareness seminars. This will lead to a more educated and well-versed population in the disciplines of finance and financial management.

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.

 

 

 

Pile of unfinished documents on office desk, Stack of business paper
Are you constantly shuffling through your receipts in your purse or do you have a drawer full of invoices and papers? Are you trying to get rid of them? How about just ending the clutter once and for all and start managing them appropriately?

Keeping track of your expenses can be a challenging task, whether you are a business owner or managing your household budget. Generally, businesses hire an outside source for bookkeeping. However, if you are running a household, hiring a professional might not be an option for you, which is perfectly fine. Some may think that these small pieces of paper are nothing more than trash. However, when it’s time to do your taxes, these pieces of paper can help you tremendously.

After doing a little research, we will discuss a few tips and ideas on how you can end the clutter and be more organized with your receipts.

Mobile Apps/Online Services

We all know that technology has taken over the world. Our life has become so dependent on phones and computers that we cannot fathom living without them. To your benefit, you can download apps that will help you organize your receipts and invoices. Online services like the Cloud are also very useful. Some apps allow you to migrate all of your information to online services that can save you from hassle. If you are a tech-savvy person, this might be the best option for you.

Organizational System

Tracking your business expenses can be difficult, especially when you have to report specific information. For example, you plan a dinner for your employees and spent $200. When sharing this information for bookkeeping purposes, you have to be very accurate with the information such as how many employees were there, what their job title is, date, and place of the dinner. You can simply write this information on the bill/receipt or get a journal to write the information down in and attach the bill with it. 

Maintain Records

It’s an old-school style, but if you plan to claim your expenses from the IRS, you definitely need receipts for the record. You can make a separate folder and place your receipts in them. Receipts that are months old may fade away with time. Or, if for any other reason, you are unable to read your bills/receipts, what is your alternative? Always make sure to keep a hard and soft copy of your invoices. Take a picture from your phone or scan your receipts. Make a backup folder in case your system crashes. 

Categorize Your Receipts

Categorizing your receipts is another good way to organize them. Let us say that you have a credit card that is used solely for business purposes. Whatever transactions you make on that card, keep the bills according to the specific items; credit card statements just give you the numbers in a lump sum. For example, you purchased office supplies three times in a month and purchased furniture twice a month, keep the bills separate. It is going to make your life easier if you categorize your individual purchases because, if you plan to show it to the IRS, they will want to see the details rather than just a credit card statement.

Conclusion

As mentioned above, managing your expenses is not an easy task. Even if you manage a monthly budget for your home, start organizing your receipts. Do not throw them in your wallet or drawers, as they will end up cluttered and untidy. You do not have to be perfect. Just get yourself a folder, categorize it using tabs such as grocery, utilities, etc., and every time you make a purchase just keep your bills/invoices/receipts in it.

There are many different options for organizing your receipts; it is up to you to decide which one works best for you.


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.