Posts

Cloud service icon with options and devices
Small business owners who have recently stepped into the marketplace, which is raging with cut-throat competition, are actively seeking ways to improve their accounting methods to achieve a stronger footing. Technology has made the lives of many giants, like Walmart and JC Penny, effortless and convenient. Not only have they improved their vendor and distributor relationships using ERPs such as SAP and Oracle, but they have also attained greater accessibility to their business operations world-wide. This kind of accessibility is useful in order to provide consistent service to customers throughout the world. For small businesses, it is therefore essential to get in line with these giants in order to remain competitive. Cloud-based accounting tools, such as QuickBooks, can bring a few of the benefits that these big organizations enjoy.

1. Centralized Database

One of the most important outcomes of using cloud-based accounting tools is the centralization of data across the organization. This enables small business owners to keep track of operations at all times. Real-time updates are available on the go. Not only does this centralization help with being up to date, but data or any significant information may be procured easily from anywhere around the world through a smartphone application. This reduces the effort of having to be present in the office for all important updates around the clock. You have your workflows and statistics accessible for monitoring, even while on a family vacation in Hawaii!

2. Improved Relationships with Vendors and Distributors

Cloud-based accounting tools leverage the opportunity to improve relationships with vendors and distributors. Failing to settle vendor obligations can lead to a delay of services from the supplier’s end. This may eventually result in lower customer satisfaction if orders are not processed well in time. Hence, keeping both entities happy and satisfied is of critical importance, especially for small business owners as they have fewer alternatives available. Moreover, switching costs may be higher for small business owners if any of their suppliers decide to discontinue service. Unhappy customers may as well be problematic, provided the existing competition in the market and the dire need to survive.

Cloud-based accounting tools enable the settling of invoices as well as making payments through the online portal accessible to both entities involved in the transaction. Moreover, with this real-time collaboration between stakeholders, communication is quick, two-way, and more efficient. Late payments can no longer be backed by irrelevant excuses – ‘I failed to keep track of your payment deadline owing to my busy work schedule’.

 3. Paperless and Eco-Friendly Environment

With the help of cloud-based accounting tools such as QuickBooks, bookkeeping has become paperless. For small business owners, the need to maintain accounting records in paper form seems like a hectic job. Traditional bookkeeping became obsolete centuries ago. Keeping paperwork alive means adding to the workload. With a little extra cost, the workflow can be automated using cloud-based accounting tools that are both eco-friendly and time-saving.

Moreover, this automation leads to reduced manual errors and risk of losing data. Losing a vendor’s invoice can turn out to be quite detrimental to any business – small or big. Cloud-based accounting tools ensure a secure digital space for all of your useful business data.  Cutting down on the use of paper means lesser deforestation and a greener, cleaner air to breathe. Who’d have thought automation through cloud-based accounting tools could lead to higher levels of oxygen in the environment.

Conclusion

Cloud-based accounting tools can bring about these aforementioned advantages to small businesses and help with streamlining various accounting activities in an efficient and cost-saving manner. This type of efficiency allows small businesses to grow and secure a standing in the market alongside big organizations.

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 using computer laptop in flower shop
For a small business, it is critically important to have a strong business credit. Its significance is due to two reasons. One is that it is helpful in maintaining a separate personal and business credit history, secondly, it is helpful in building a strong credit score. Strong credit scores have various benefits for a small business. A strong business credit score is helpful in securing better interest rates and having better trade relations with valuable suppliers. Lending money or getting more credit to grow your small business becomes much easier due to strong business credit. 

Let’s discuss the ways by which you can build business credit for a small business.

Mapping of the business

The first ever step in building business credit is to establish your small business. Building business credit is a dream without establishing your business. Just opening a business does not mean that you are now in the main streamline of the business world. Following are the necessary elements to a mainstream business.

  • Obtain an EIN for your small business. EIN is a social security number used for filing federal taxes and for opening the business account.
  • Obtain a phone number and get it enlisted in the directory so that it can be found on search. A mobile number, landline number or VoIP can be used for a small business. This number should be on the legal name of the small business.
  • Open your bank account. This account number should be opened in the legal name of the small business. All transactions and bill payments for the business should be done through this business account.

A good relationship with suppliers and vendors

A solid line of credit with suppliers and vendors is an asset to your small business. Establish and maintain a pleasant relationship with them. Having to prepay for things can be avoided by building a better relationship with vendors. A simple method for building a positive credit history is to build a line of credit with three to five suppliers or establish payment terms of net thirty days. Ask this supplier to report the payment history of your small business to credit reporting agencies.

Timely payments

Timely payments have a very positive and amazing effect on your credit profile.  Late payments badly affect your image. Timely payments of all bills depict that you are a reliable business owner and you have enough money to pay on time. Moreover, you can pay off debts timely. Vendors, lenders, and creditors don’t hesitate to build any kind of contract with you if you have a history of paying on time.

Business credit card

Open at least one business credit card. More than one business credit card is also recommended, but use them cautiously and avoid overspending. Preferably, the business credit card should be opened with a company which reports to credit card reporting agencies. These companies are beneficial for establishing credit.

Incorporate your small business

The small business should get incorporated to separate legally business and an owner’s personal profile. Incorporation can be done either by adding Inc or LLC. This is a legal way for separating personal credit history from that of the business. And, ultimately helpful in establishing and building business credit for your small business.

Separation of personal and business expenses and finances

Business expenses should not be paid from your personal credit cards and personal bills should not be paid from the business accounts. Both credit profiles should be clearly separated. This will not only help to build business credit, but also make payment of taxes easy and comfortable.

Monitoring of small business credit

Credit card statements should be regularly monitored. Any error should be reported to credit reporting agencies. About 25% small business owners have reported errors in their credit reports.

Conclusion

Building a business credit for your small business is key to further progress and growth.

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.

 

 

 

 

 

 

.

 

Wooden cubes with word "Tax" on dollar bills. Isolated on white. Business concept.
Circumnavigating the tax season can prove rough for all companies; nevertheless, small businesses become very vulnerable when we talk about dissecting the issues regarding tax and making optimal decisions regarding the financial health of the company. The time to think about tax season is not at the start of the year, it is throughout the year. The following five strategies will help numerous small businesses plan for a very simple tax season.

 

  1. Invest In Your Retirement Now

If you are a small business owner, you need to create a retirement plan that takes complete advantage of the tax deferral rules in order to maximize your tax savings now and all the retirement savings for later. Rather than trying to tackle all of the various ins and outs of setting up your retirement plan on your own, it is advised that you consult a professional in this field. There are various options available which you could choose from. Let a professional make this choice for you, not only will they help you with your business finances but with your personal finances as well.

 

  1. Make Balancing Taxes Your Priority

Traditional tax planning is comprised of having to accelerate the deductions and the credits. This will occur alongside deferring the income. Numerous taxpayers are “cash taxpayers”, which means that the users get to deduct the expenses when they are all paid and must declare the income once the payment is received. Thus, expediting the expense payments whilst deferring the income payments might improve your current year’s tax position. You need to bear in mind that the inverse also rings true. If the business is anticipating a significant revenue in 2018, it is wise that you collect the income this year and furthermore delay the expenses until the year 2018.

 

  1. Find Silver Lining in Loss as Well

Numerous small businesses finish off with a net operating loss during the initial years of the business operation. The net operating loss leads to a tax deduction bigger than the taxable income, which mostly occurs when all of the various business expenses exceed the earnings. Even though this appears to be very bad news, NOLs (Net Operatin Loss) might be used to recuperate all of the past tax payments and reduce the tax payments in the future. NOLs can be used to create tax relief by applying the loss to the payments and receiving a credit by applying the net loss to the future income tax. The rules will vary based on the business; therefore, understanding how to work them will have a huge impact.

 

  1. Understanding the Taxable vs the Nontaxable Fringe Benefits

All fringe benefits, for instance: a company car and subsidized meals along with insurance, is an amazing way to pay for all of the services along with decorating an even more appealing employee package. Nevertheless, all of these various fringe benefits are taxable most of the time. Having an in-depth knowledge of which fringe benefits lie outside of the taxable demesne might ease the tax burden each year. When small businesses appreciates the benefits, you will also be able to save money on the payroll taxes. The tax rules for every user are somewhat different, therefore it is important to select the correct fringe benefits for your company.

 

  1. Invest in the Counsel to Benefit Small Business

Planning all of your taxes should never be an end of the year scramble. As an alternative, it should involve a reliable and yearlong conversation with a tax lawyer or a professional accountant. It is better for the continued health of the business to work with a professional who has been in the industry for a long period of time who also knows the ins and outs of the industry. You will also save a huge amount of money when you work with a professional.

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.

 

USA United States map multicultural group of people integration immigration diversity isolated
Doing business in other states is known as a foreign qualification. It can actually be quite confusing. It may sound like an international concept, but “foreign” doesn’t mean anything outside of the United States when it comes to U.S. corporations and limited liability companies (LLCs). It’s really about operating domestically in the U.S., but outside of the state in which you incorporated your business.

What is a Foreign Qualification?

Foreign qualifying is simply the registration of doing business in a state other than the one in which you incorporated. That’s because companies and LLCs are considered domestic only in their state of incorporation.

Foreign Qualification Process and Requirements

When you foreign qualify a business, you register for a Certificate of Authority in the state(s) where your company will do business and pay compulsory state fees. This informs the state that your company is conducting business within its limitations. If your business enlarges into new states and you need to foreign qualify, these initial and ongoing fees should be considered a required part of doing business.

Do you need to foreign qualify?

If you are presently evaluating whether to incorporate in a state other than the one where you are located (your home state), you should consider whether you may need to foreign qualify in your home state. There are many factors used in determining the needs of foreign qualify. While different states have different criteria for conducting business, consider the following:

1.    Does your company have a physical presence in the state?

2.    Does your company have workers in the state?

3.    Does your company receive orders within the state?

4.    Does your company have a bank account in the state?

If you answered yes to any of these statements, you will most likely need to foreign qualify your business in the state. If you’re still not sure if you need to foreign qualify, you may want to get the advice of a lawyer.

Consequences of not foreign qualifying

State laws require foreign corporations and LLCs doing business within their borders to foreign qualify and the penalties for not doing so outweigh the costs:

o You may lose access to that state’s court system

o You may face fines, penalties, and back taxes 

Foreign qualified or incorporate in every state?

An alternative to foreign qualifying is to incorporate your business or form your LLC in the other state(s) in which you plan to do business. The primary difference is that when you incorporate or form your LLC in multiple states, your company becomes domestic in each of those states, thus creating separate entities. Consider the following in making your decision:

a)   Increased corporate formalities: For corporations, the increase in corporate formalities is a big hindrance. Corporate procedures include drafting and maintaining regulations, issuing stock, and recording all stock transfers. Also holding initial and then annual meetings of directors and shareholders in addition to keeping minutes of all director and shareholder meetings with the corporate records. LLCs do not face the widespread regulations imposed on corporations.

b)   Separate owners and management: When you create a distinct corporation in each state, each has its own stock, shareholders, directors, and officers. Even if they are the same people for each, the formalities apply for each domestic corporation, greatly increasing the annual record-keeping requirements.

c)    One company versus separate companies: When you foreign qualify, only one corporation or LLC exists. For corporations, irrespective of the number of states in which it foreign qualifies, it needs only one set of statutes, stock, shareholders, directors, and officers. Bookkeeping for initial and annual meetings of directors and shareholders happens only once.

d)   Separation of liability between businesses. Forming a new corporation or LLC in each state provides liability separation. If you have foreign qualified in each state, only one corporation or LLC exists, so there is no separation of liabilities.

Conclusion

Although each foreign qualification comes with filing and/or annual fees, additional laws to become familiar with, and added paperwork, you should never overlook your business’s legal obligation to foreign qualify.

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.

 

QuickBooks


QuickBooks has proven to be a useful invention in the discipline of accounting and bookkeeping, especially for incumbents and small businesses. Despite the market being flooded by many similar accounting software, such as Xero, Wave, FreshBooks etc., QuickBooks has taken the lead by transcending the competition. It has been the most favorable among small business owners. It’s several versions are catering to multiple business needs that other competing software lack to date. Its transcendence in the market for serving small businesses are attributed to the following reasons.

Diversity & Flexibility

QuickBooks is available in different versions allowing for greater diversity in serving small businesses. Small business owners can choose from an array of versions depending on their unique business needs and specifications. For instance, QuickBooks Pro, QuickBooks Online Plus, QuickBooks Mac, QuickBooks Hosting, QuickBooks Premier Hosting and the sort. Each one comes with a unique set of features to enable businesses to choose the one that fits best with their business needs. The various versions may be purchased according to one’s budget as well, allowing for even more flexibility. Hence, QuickBooks leads the competition through flexibility in pricing and features.

User Friendly

Another reason for this market transcendence is the user friendly interface that it comes with, allowing for easy access and use within the business. Employees working on a legacy system are generally more resistant to change. Traditional bookkeeping has been popularly replaced by accounting software which may be a source of intimidation for employees at work. However, QuickBooks helps with the initial phase of using the software step-by-step and also extends the option to seek professional help, if need be.

Compatibility

QuickBooks offers a compatible interface that may be integrated with multiple vertical market applications easily and without much trouble. This superior compatibility helps with aligning and streamlining every single process within the organization and allows for savings in terms of cost, time and effort. Automation sounds like a brilliant idea when it comes to accounting, but automation to this extent is no less than a miracle for small businesses.

Customization

In addition to the above reasons, QuickBooks has been successfully outperforming the competition due to its ability to customize almost everything related to accounting and bookkeeping. One can customize a chart of accounts to their specific business needs, customize invoices, sale receipts, and estimates. You name it and QuickBooks has it covered! It sure is a one-stop solution for all your tedious accounting hustles.

Simplification of Tasks

QuickBooks has been an innovation in the market to help serve small business needs related to complicated and enervating accounting procedures and activities. Not only has it provided a complete and sorted package for A to Z accounting but it has helped with simplifying complex spreadsheets, returns filling, reconciling, invoicing, and financial reporting tasks throughout organizations, especially for small businesses.

Unlimited Features

QuickBooks has also taken over full responsibility for performing all of the accounting tasks with the provision of its various features. It manages cash flows, invoicing, billing, receivables and payables, employee performance, bank transactions, check printing, online banking, emails, payroll as well as financial reporting. Other features include access to its online version from any and all internet-enabled devices. This is particularly useful for small businesses that are operated remotely.

Business Tracking

Another one of the many reasons why QuickBooks has led the market competition is the streamlining and automation that it has facilitated for small businesses. With its use, business owners have been empowered as they can now track each and every business transaction and workflow hassle-free and in a seamless manner. This has enabled a transparent work environment for small business owners.

Conclusion

Therefore, based on the numerous reasons identified above, QuickBooks has remained victorious in establishing a position for itself in the market – a position that transcends that of any competitor serving small businesses.

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.

 

 

 

 

 

 

 

illustration of a self storage unit
Keeping everything organized in your business allows it to run like a well-oiled machine. The boost in efficiency that proper organization gives is beneficial to businesses, small and large. However, small businesses often neglect this crucial factor of efficiency which limits their ability to grow and expand operations.

One important aspect of keeping a business organized is having adequate space to keep unused equipment, inventory that hasn’t been stocked, and files for records that might be needed at a later date.

What is Self-Storage?

Self-storage is a provision of storage space that is provided by a service provider for a short or long period of time. The tenants of a self-storage space pay rent, usually monthly, to the service provider. Some self-storage businesses may facilitate contracts with annual payments and long-term leases. Tenants can be both businesses and individuals.

Commercial real estate is expensive. However, self-storage falls into the budget of many small businesses. Considering the low price compared to other options, it is easier for businesses to incorporate and sustain the use of self-storage facilities into its operations.

Benefits that Can be Offered for Using a Self-Storage Facility

Certain services might be offered by a self-storage provider other than the actual business of storing materials.  These benefits may include:

  1. Meeting Rooms
  2. Fax and Internet Services
  3. Courier Receiving Services
  4. Package Sending Services

These services are provided to attract smaller businesses, as larger organizations already have them. These services can be beneficial for your small business as it is expensive to get them.

Businesses that Use Self-Storage

Different businesses have different kinds of storage needs. Self-storage units can be modified according to the kind of equipment and inventory you want to store. Examples of small businesses that use self-storage services include:

  • Landscape businesses that require the services of a storage unit to keep their equipment
  • Medical offices that need a storage unit with climate control to keep and preserve patient records
  • Restaurants, hotels, and motels utilize self-storage to keep seasonal decorative items as buying them in the season can be more expensive

In conclusion, if you are an owner of a small business looking to better organize your business in order to streamline operations and improve efficiency, it is recommended that you look into the benefits of availing these self-storage facilities.

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

Business people meeting at office and use post it notes to share idea. Brainstorming concept. Sticky note on glass wall.
Small businesses must come up with innovative marketing strategies if they want to stay ahead of competitors. Although, the conventional ways of marketing a product or service are still relevant, try using new ideas to reach out to your target market. Listed below are 18 of the best marketing strategies for small businesses.

Get out of the Store

Establishing a presence on the internet, even if you have a physical store, is critical. Create an interactive, regularly updated site or blog and build informative yet informal profiles on social networking sites such as Facebook and Twitter.

Share your Expertise Freely

Let the public know what you’re an expert in and use that to boost your reliability and value. Publish tips, share your expertise through public speaking, and even try pitching to the media. Make it super easy for people to associate you and your business with excellence and expertise in your field.

Never Stop Growing your Network

Expand your network of contacts and potential clients. Ask your best, most powerful, influential friends or business associates to introduce you to the five people they think you should meet to expand your business.

Twitter Giveaways

Give away your product or promotional item on Twitter.

Network your Networks

Network with friends who then network with their friends. There’s power in numbers. Don’t spam, of course, but utilize your network to get the word out to your people who know people who know people.

Maintain Relationships with Clients

The difference between a successful company and a mediocre one often boils down to an owner’s commitment to building (and sustaining) relationships with clients and prospects.

Listen. Tweet. Listen. Listen Again.

Identify your ideal clients and find them on Twitter. Then start following them! Spend weeks listening to them; you’ll be amazed what they will tell you about their concerns, their ideal products, and their current frustrations with their vendors. It’s a great way to get open and honest market research.

Leverage Linked-In

Join as many Linked-In groups as you can that are related to what you sell and post a question or tips on a regular basis.

Facebook It!

Your Facebook friends can be your greatest free marketing tools so enlist their help! On Facebook, use the NOTES application to create a special, limited-time “friends and family”promotion.

Tweet It!

Twitter is a great place to share photos, host contests, shout out to loyal customers, have scavenger hunts, and promote events.

Blog Tour

Blog tours are like book tours, but without all the flying, cheap hotels, and fast food temptations. They’re a great way to get seen and discovered outside your usual niche, all from the comfort of your own office or home.

Inspire Customers to Call You

Do something really different. Send a monthly postcard instead of a hard copy newsletter.

Be Generous

To keep customers loyal to you, instead of a frequent buyer program, send your customers small “surprise” gifts.

Low Hanging Fruit

Turn to those in your field for the low hanging fruit. Find larger companies or older, more experienced businesses and invite them to lunch. Ask them to consider referring their smaller cases, or business they don’t have time to handle, to you.

Feed them and They Will Come

Anything involving food gets attention. Partner up with local neighborhood businesses and a restaurant (or other service providers in a complementary but non-competing industry if that’s your gig) to throw a special event.

Help Other Employees

Offer employee incentives to various big businesses or to smaller businesses in your hometown.

Online-Map Listings

Online map listings are essential for businesses with brick-and-mortar locations. They are the first thing people see on search engines.

Small Groups

It only takes one person to start a movement. So don’t hesitate to start an informal group that can provide something of value to the market in which you specialize.

 Conclusion:

To conclude, these marketing ideas will surely help you in promoting your products or services among your target consumers. You must devote time and money to reap benefits out of these strategies.

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.

 

Stressed business woman running out of money - stock and market down
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.

The most common area where small business owners make mistakes is in accounting and bookkeeping. Small business accounting mistakes range from minor errors (e.g. to save a receipt of minimum amount) to big accounting and bookkeeping errors which cause serious threats to the business.

Entrepreneurs/owners often do not see the impact of the common small business accounting mistakes as a major threat to the growth of business in the long run.

8 Common Small Business Accounting Mistakes that Pose Risk to Business Stability

  1. Business owners mix personal finances with their business account

  • Business owners mix their personal finances with business expenses. Keeping these two finances separate is of utmost importance. If these two finances (personal and business) are not segregated then it cannot be known what was intended for business and what was used personally. The finances cannot be estimated correctly and the amount of profit generated out of invested capital cannot be calculated. 
  • A business credit card is utilized for personal expenses during a holiday trip or other excursions. Later on, this amount will be paid from the company’s income.
  • During purchase orders for inventory of the company, purchases are also made for personal or private use.

  1. Trying to manage all accounting and bookkeeping yourself

  • A small business owner is often an all-rounder. They constantly try to manage all business functions themselves. Accounting and bookkeeping are hectic and time-consuming jobs. If you spend all of your time in accounting and bookkeeping, you will miss doing other important business operations.
  • If you have an accountant to manage this, you will be able to keep a second eye on accounting and bookkeeping, but also free up time for other areas.

  1. Infrequent bookkeeping

Entries are not done in time. Running behind in bookkeeping and the submission of entries of the expenses or sales will not yield an up to date picture of the business and allow you to make timely decisions. It can lead to a 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 give your company a bad name. It can end terms with the suppliers. Business growth is halted or significantly reduced.

  1. Covering small expenses out of pocket without recording

Sometimes, it’s easier to pay small expenses out with your own money in business. And, often, these payments are small and not entered into the bookkeeping record.

Paying out of your pocket falsely makes your company appear stronger in income than it actually is.

  1. Starting new projects and ideas without a clear budget

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

  1. Not saving the original receipts after entering them register/books

Keeping all receipts until all taxes are paid and an audit is produced is a must. Even after that time period, receipts are very important for matching data entries in a register or in software.

  1. Not using accounting software or cloud technology

Failing to set up a correct software as needed by your company leads to poor decision making, because installing the improper (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 applications come with guided help boxes to make the accounting process easier to interpret. Inventory control tools are provided in the software. Tax matters are made easier using accounting software.  It’s best to make the jump for your company and purchase the best software for your company. 

  1. Wrong interpretation of accounting information

  • Accounting information software is just a tool to use. Decisions must be made after completely checking the financial reports and interpreting the data. Data interpretation is made by comparing financial statements with the cash flow statements and the balance sheets.
  • Entrepreneurs/business owners/directors must focus on long-term consequences of decisions they make after getting a full picture of the company’s accounting information. Short term decisions after interpretation of accounts data do not provide the company with long term benefits. 

Conclusion

Small business accounting mistakes are not small and can dissolve the business in the long run.  Accounting and bookkeeping tasks should be managed by a trained professional and you must closely monitor your accounting and bookkeeping data. Use accounting software for bookkeeping. Neither mix personal expenses with the business account, nor pay out of pocket for business expenses. These small mistakes lead to big problems in the long run for your business.

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.

Closeup of hands working on computer keyboard
There is no denying the fact that small to mid-sized businesses are more vulnerable to cyber theft than are larger businesses. They are an easy target for cyber criminals as, often, these businesses have no IT department, simple networks, and are less likely to follow industry best practices to prevent their sensitive data from being stolen. This is causing US-based companies to lose billions of dollar each year, which is why the need for hiring top IT professionals for prevention of cyber fraud is becoming inevitable. Unarguably, a data breach can be costly to companies looking to expand their business operations in other IT domains. In short, cyber fraud is a curse that is kicking many multinationals out of the competitive race which is why companies need to come up with a sound theft prevention plan for achieving their intended business goals and ambitions.

 Cyber Fraud In Small Businesses

Prevention of cyber-fraud is critical to a company’s long-term success. The biggest dilemma is that many small business owners fall prey to the idea that their company is too small to be a playground for cyber criminals and mistakenly believe that their business won’t be a target. Regardless of the company’s size and scale, cyber attackers will exploit any opportunity at hand and steal sensitive information using sneaky tactics. They are smarter than you think and imagine and their hacking knowledge encourages them to get into this “so-called” profession and make the most out of it.

The age of digital evolution has brought vulnerabilities, strains, and repercussions. Along with it, cyber fraud is becoming much more common in today’s corporate setting. Generally, we hear news about multinational corporations that have been affected by malware infections, viruses, and other advanced persistent attacks costing billions of dollars each year. But, what about small businesses? Small business owners feel reluctant to accept the fact that cyber fraud can happen to them and they, too, can be under the radar of malicious cyber attacks.

What’s more?

According to a study conducted by one of the top IT firms in the US, as much as 63% of cyber criminals target small businesses. Cyber criminals are generally known to be magicians who know the art of stealing by skimming through online channels and networks. Therefore, small businesses need to change their approach and do something to prevent their sensitive information from leaking out of their company networks.

Why Are Small Businesses A Target For Cyber Criminals?

There are countless reasons why cyber attackers often target small businesses. Here are the top two reasons why small businesses are more vulnerable to cyber fraud.

No IT Department

Small businesses usually lack the resources to hire top IT professionals to secure their networks, devices, websites, servers and online operations. This is why they are more likely to face potential threats from cyber criminals every single minute of the hour. The biggest misconception about hiring IT professionals is that ‘they are expensive’. However, this is not the case. There are many IT professionals and start-up cyber security agencies that offer services at competitive rates. 

If you are doing it yourself, you need to update your servers and install the latest security software to take more control of the rising situation at hand.

Simple Network and Systems

Small businesses have simple network and systems compared to larger businesses. A small business generally lacks the room full of servers and network devices. Even if they have on, they are often outdated and non-operational. New networks and systems now have advanced security and layers of encryption that prevent leakage of information. Cyber criminals find it hard to break into advanced networks and systems which allow businesses to identify the intrusion and gives them time to secure their data.


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.

Hand holding envelope  of cash
Embezzlement is the theft or misappropriation of funds placed in one’s custody. In other words, it is stealing something from an organization that is not yours. Regardless of the scale or magnitude of a business, embezzlement of funds exists in almost every organization. Therefore, you must come up with a prevention plan before it drains your small business.

Employee fraud and embezzlement can occur in any organization. Small businesses often lack experience and knowledge, which prevents them from having the right checks and balances in place. According to studies, businesses lose approximately 8% of their annual revenues from theft and embezzlement, making it the biggest reason why most start-ups fail to create an impact. Employees can make or break a business. They have the potential to take a business to the top or break it apart to pieces. Employees can determine the fate of a company and it’s long-term survival.

Employee embezzlement can drain your small business, perhaps making you lose everything within a short span of time. The portion of assets than an employee steals each month accumulates to a huge amount, which eventually leads a business towards its gradual demise. Stealing from an employer raises serious moral and ethical concerns; it’s not a legal activity under any circumstance. Moreover, it may lead one to face serious repercussions such lawsuits and jail time.

Embezzlers can often get away with their actions because they are smart and steal at a suitable time of their own choosing. They know the processes of their organization and have a clear picture of how to steal without getting caught. However, with increased technology and advanced accounting software, now you have options to prevent maximum leakage or data theft in your company. Below are our suggestions on how to stop embezzlement before it drains your small business.

Look For Financial Discrepancies

An unusual fall in profits or a squeezing profitability index are symptoms of embezzlement. By keeping a highly advanced system in place, you can prevent embezzlement or data leakages. In doing this, you will get to know your profit shortfalls and even catch culprits for further disciplinary actions.

Regularly Check Company Records

No matter how much trust your accountant, you should always regularly check your company’s financial records to obtain a clear picture of the finances. Any discrepancies found in the records should be taken care of wisely. Financial books and bookkeeping records reveal the true status of a company’s finances.

Respond to Client Complaints

This is one of the major ways to find out if embezzlement is occurring in your organization. Clients often complain when their order is not dispatched properly or doesn’t justify their expectations. Therefore, if you start to receive a lot of complaints, it is wise to look into the matter. It may show you if something suspicious is happening.

Notice Employee Habits and Behavior

Pay attention to any significant changes in the habits and behaviors of your employees. To stop embezzlement before it drains your business, you need to develop a mechanism that may discourage employees from participating in such malicious and unethical deeds.

Leverage Control over Financial Decisions

In the core of every successful business lies well-established and ethical teamwork. You can’t expect to excel all alone. You need to empower your team to help with the prevention of fraudulent activities. Although most organizations are affected by this disease, you need to come up with suitable preventive measures in order to stop and save your organization from embezzlement.

Leverage control over your organization’s finances to establish your leadership over all aspects of your business, especially related to financial decision-making. Stopping embezzlement in it’s tracks is extremely important for winning the competitive business race.

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.