Accounting Tips to Non Accountants

Accounting Tips to Non Accountants

The word “accounting” turns our hair white and makes us want to cringe. A lot of numbers, percentages and rules to follow don’t sound like a fun activity for you and the whole family. Needless to say, many entrepreneurs who are just starting out are really struggling with this aspect of their business. Getting on the right track with your accounting affairs means future project success and no hidden financial surprises, which you were unaware of. Here are a few tips Accounting Tips for Non Accountants to help you in your auditing tasks and avoid issues with the IRS.

1. Get into the habit. Accounting is not a one off thing that you have to do every April on your kitchen table, with loads of receipts, soaking up several cups of coffee while you bang away nervously on an unfriendly calculator. You should do your accounting every morning or else every week. Make it a point to set up reminders to yourself that that time allotted is for bookkeeping revision. To keep your records constantly up to date you must at least do them

2. Financial Slang. Understanding accountancy means speaking like an accountant. I know financial slang isn’t really hip, but it will save you a lot of frustration trying to make out the difference between debits vs credits, accruals vs expenses and what the general ledger is all about. Take a look at the US Small Business Administration’s Small Business Development Centers as well as the accountancy groups American Institute of CPA’s and the Association of Chartered Certified Accountants to help you understand the basics. There are several in the Las Vegas and Henderson Nevada area.

3. Use Software that you are comfortable with. Software was not made for everyone in mind. Therefore, do not feel pressure to use a specific type of software just because that is what your friend “John” uses. If you can always be found at your desk, then QuickBooks Desktop would be your best option. However, if you are always on the run, opt for something more mobile like Xero. Nowadays, with the introduction to tablets and cloud computing, cloud base accounting software such as Easy Books and Kashoo have apps, which let you operate your business from the comfort of your iPad no matter where you are.

4. Accept any welcoming advice. Some might say that the time used to figure out accounting could have been used to run the business. This is nothing but true, since taxes must be filed not only quarterly, but also annually. Looking for help and advice in focus groups is not a bad idea. Check out your local community for any talks and classes that are being held. Also, ask around, especially your previous bosses and other entrepreneurs to see which accounting firms they use. You could find a great accountant or bookkeeper who specializes in small businesses and won’t break the bank when it comes to their fees.

You never know, you might want one on hand to ease you down from the ledge just in case the IRS sends you a startling email. Accounting is your friend not your foe. If you know how to start and keep up with it consistently,the cash flow and success will be as regular as the IRS sending you your tax form returns.

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    How can an Audited Financial Statements help you to Borrow Money?

    How can an Audited Financial Statements help you to Borrow Money?

    For small businesses to get ahead of their competitors they will from time to time require capital, affirms Henderson, Nevada financial firm CPA Financial Architects. Biz2Credit Small Business Lending Index claims that about half of small business loan applications are denied by banks. The lending environment is no piece of cake, so borrowers are turning to audited financial statements to make lenders more acceptant. So how can an Audited Financial Statements help you to Borrow Money?

    CPA Financial Architects even had clients come to them requesting financial statements, just so they can get the loan and work out the interest rate on it. Studies show companies with audited financial statements have lower interest rates by three quarters than companies who do not. Audited financial statements can be pricey from $15,000 to $20,000 for small businesses and $50,000 to $75,000 for in the middle businesses. CPA Architects in Las Vegas – Henderson suggests entrepreneurs should do the math before going ahead and hiring an auditing firm to scrutinize your books. Sometimes a simple review from an auditing firm is enough and returns the same lending benefits for a fraction of the cost.

    A great start is to approach the banker and be aware of what they are looking for. The banker could be satisfied with an uncomplicated review statement. CPA Financial Architects advises any business owners looking to hire an auditing firm should make sure that the bank is comfortable with them first, since the bank could have a set of standards that the auditor has to meet.

    CPA Financial Architects deals with many businesses in the Las Vegas area and have seen so many go out of their way to hire an auditing team when it was not necessary. An evaluation has to take place to see how the cost plays against the benefits. It is pointless to incur the expense of an audited financial statement when a loan approval is not a set goal. However, in some cases audited statements can benefit business owners to set up larger and better arrangements of credit with suppliers or grabbing the attention of outside investors.

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        Do I Need a Bookkeeper or an Accountant?

        Do I Need a Bookkeeper or an Accountant?

        CPA Financial Architects understands that an entrepreneur sometimes means being a “one man show”, so they do very well in DIY situations. The mentality is do everything that you can do yourself, therefore you don’t have to pay someone else to do it for you. That’s why it is very difficult to convince entrepreneurs, not just in Henderson, Nevada, but also worldwide, that hiring financial help such as a bookkeeper would be best for them as well as their business.

        Technology makes it very easy for all of us to look at it that way. The development of user-friendly software like QuickBooks, allows many business owners to believe they can keep their records without any help, even though they are struggling to squeeze in the time to do them and are in self-doubt whether they are actually doing things correctly.

        Randy Mitchelson ran National Web Leads, an Internet marketing company in Estero, Fla and found that he constantly struggled to hire a bookkeeper. He as well as many other fellow entrepreneurs find basic accounting a breeze to do, but it takes you away from actually working on your business. As time goes on, Randy’s accounting and tax planning got more and more puzzling. Therefore, entrepreneurs only realise after being in business for an extended period of time that they were not doing so well on their own and call in a profession to untangle their financial knots.

        Even The Fresh Diet’s chief executive, Zalmi Duchman, had to take the plunge and hire a bookkeeper after five years of working without one.  He understands his meal-delivery company in Miami is better off with one. The bookkeeper organized accounts, so expenses were in one ledger and assets were in another.  The new employee went as far as reviewing employee purchases for duplications and started to maintain the humdrum, but important task of paying bills. Duchman saves $500 to $1,000 in late fees every quarter and feels he can now make better as well as more professional decisions.

        Do I Need a Bookkeeper or an Accountant? Below are some options for small business owners who are seeking professional help with their financial workload:

        Who to Hire? A Bookkeeper or an Accountant?

        Well, you could require both of their services. It depends on your situation, sort of like when you are building a house you need an architect to draw the plans and the carpenter to carry those plans out. An accountant examines your financial situation and provides imperative advice. Also, CPA Financial Architects, who are accountants in the Henderson, Nevada area just outside of Las Vegas, remind us that accountants generate essential financial documents, like a profit and loss statement and file a company’s taxes.

        Once tax season is out of the way, an accountant can be contracted out as a chief financial officer, giving the entrepreneur advice on financial strategies, such as deciding if gaining credit, in order to introduce new products, is financially beneficial for the company. Bookkeepers are different, because they are more hands on with the day to day financial workload of the business. For instance, guaranteeing new employees give in all the correct paperwork for the company’s payroll, sending out invoices and chasing up on them, as well as paying bills. Bookkeepers are also responsible for noting down all company expenses and recording them into the books (correctly) into an accounting software system like QuickBooks, so the business is prepared when tax time reappears once again.

        How Often Do You Need A Bookkeeper?

        A few hours a week within the first few months of a new venture is a good start, suggest CPA Financial Architects. A bookkeeper is usually very occupied the first six to nine months on recordkeeping to actually keep an eye on trends and strategically focus on where the money is being spent and how it can be saved. However, when things start to settle, the bookkeeper can offer this service to you. This is when he or she becomes a valuable asset to your company.

        Should you Outsource an Accountant or Bookkeeper?

        Many small businesses in Henderson, Nevada stay with an outsourced accounting or bookkeeping service for a long period of time. Most outsourced services are for chief financial officer tasks and bookkeeping before the company reaches the $1 million mark or when it has 30 employees -whatever comes first. Even though, the initial scenario is more desirable for any entrepreneur. In any case, until either situation materialises a full-timer will not have enough work to keep busy every day.

        If you find yourself calling your accountant every day, or wishing they were constantly by your side in the office, then it is time to get some full-time help. When your part-time bookkeeper feels like he or she would have better luck chasing their own shadow, then consider bringing in a full time bookkeeper to stay up to date with your company’s financial activities.

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            Don’t overlook business tax deductions

            Should accountants fear or embrace blockchain technology?

            CPA Financial Architects in Henderson, Nevada realise that tax time for many types of businesses, especially for the new kids on the entrepreneurial block, can be a challenging period.

            They find tax time a moment of questions and doubts on whether one figure refers to a credit towards their account or else a loss on their capital. Throughout February to April of a business’ first year provides the budding entrepreneur with a bombardment of tax knowledge – perhaps, much more than he or she ever wanted to know. However, there is always something to find out about; notably, taking advantage of business tax deductions, which can make your business more profitable.

            Below are a few business tax deductions at the federal level CPA Financial Architects believe many entrepreneurs fail to notice.  This list is not extensive, but it can lead you on the right path. For a more personalized review of your accounts, seeking a qualified accountant is highly advised.

            Loan interest

            Don’t fret if you had to ask for a loan, in order to get your business started, because there might be a hidden deduction somewhere there. Most of the time, entrepreneurs assign all of their loan payment to pay off their loan balance. Little do they know that some of that payment should be designated for their interest expense. CPA Financial Architects have helped many of their clients in the Las Vegas area to adjust this, in order to snag a large chunk of this tax deduction.

            Gaining from Bad Debts

            As you are well aware, you should always do your best to collect outstanding invoices. Be that as it may, some will default. That is ok, since you can write off the bad debt and get a tax deduction. CPA Financial Architects suggests flying this by your tax advisor first, just to be certain.

            Amortizing Intangible Assets

            There is no need to sound off the alarm. Amortization is when the cost of intangible assets is deducted over its projected life. The next red flag, “What on God’s green earth is an intangible asset?” It’s simple. Intangible assets are items that you have purchased such as logos, trademarks as well as customer lists and all of them can also be referred to as goodwill. The items are amortized over a particular number of years to lower a business owner’s taxable income.

            Use your Personal Vehicle for Business

            Using your personal vehicle for business travel is a thrifty thing to do, since expenses such as mile consumption and maintenance can be deducted. Even more importantly, use your vehicle to consume some miles when you pop over to see your accountant and get that deducted as well from the IRS.

            Use your Home as an Office

            Working from the comfort of your own home can help you to write off some of your home’s utility, rent and other expenses.

            As mention before, this isn’t an extensive list. CPA Financial Architects advises all of their clients in the Henderson, Las Vegas Nevada region to seek professional advice for all tax related issues, especially when it comes to deductions.

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                Should accountants fear or embrace blockchain technology?

                Should accountants fear or embrace blockchain technology?

                Innovations in computerization, particularly the development of the Blockchain, or digital ledger, creates a new niche, specifically suited for accountants who embrace, rather than fret the emerging technologies that look to revolutionize the financial and auditing industry. 

                Innovations in automation may bring advancement to an industry, but it also brings anxiety to its workers, who are justifiably worried about the future of their jobs. The fear materializes from the historical pattern of industrialization, where a machine replaces the need for manual laborers. Now, advancements in machine learning, or the booming development of computerization, threaten to replace the need for information workers.  And according to Bloomberg Magazine, accountants are particularly at risk of losing employment to automation.

                CPA’s must embrace this new technology or be left behind, advised Erik Asgeirsson, CEO and president of CPA.com. “You can’t fear the technology and circle the wagons — you need to see it as an opportunity,” said Asgeirsson during his keynote address at the 2017 Digital CPA conference, because the firms that are “leveraging technologies like artificial intelligence are going to win in the end.”

                Hitendra Patil, author of Accountaneur: The Entrepreneurial Accountant, shared the optimistic sentiment towards emerging technologies, saying, “Accountants have a new opportunity at the intersection of the physical and digital worlds” in an article for CPA Trendlines.

                Both Asgeirsson and Patil point to block chains as one modernization looking to revolutionize the auditing industry.  Blockchains, which Asgeirsson touted as “a new, very sophisticated database” are digital ledgers distributed across peer-to-peer networks. Blockchains present incorruptible records listing economic transactions. Besides expediting transactions, Blockchains offer a trusted transfer of value and ownership, without intermediaries, like banks.

                Blockchains depend on securing information that is unalterable and thoroughly validated. As Asgeirsson explains “Blockchain is about validated information, and when you look at it that way, it’s easy to see why accountants are interested.” With private Blockchains “there are going to be assurance needs”, it is this area of assurance, and regulation that experts project CPAs can find a new niche.

                For example, makers of crypto currency and the father of Blockchain modality, Bitcoin, requires impartial assessments to assure and authenticate the value they transfer. Another opportunity for auditing within Blockchains is “tokenization,” the transferring of physical goods into digital value or turning “the record of ownership and transferability of ownership of physical goods from tangible into fungible.” And its tokenization that allows Blockchain networking to ” transfer ownership and value much faster, irreversibly and – most importantly – without the need for intermediaries such as stock exchanges, banks, etc.,” says Patil.

                To function properly, tokenization requires the digitized value to correspond to the underlying physical good. This calls for someone to “to ensure that the value tokenized indeed exists, in the form, shape, size and several other properties associated with those physical goods.”  There needs to be a trusted authenticator of value transfer, even a certified agent that validates the tokenization process and according to Patil “Accountants – armed with intense knowledge and experience of numbers, processes, integrity, compliance expertise and the sheer magnitude of technology they use on a daily basis – are ideally poised…” to fill this position.

                Who knows, perhaps audits of the future will involve issuing Blockchain-based, verifiable certificates of authentication – giving rise to a new qualification: Certified Blockchain Accountant, or CBA” Patil predicts.

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