Helping to protect the environment
by Maki
Learning from traditions – K’aaw K’iihl
This spring, I was asked to teach a Grade Four class how to show respect for the environment. To start them thinking from a new perspective, I brought up a story from the First Nations people about their tradition called “K’aaw K’iihl”. When the Skidegate community in Haida Gwaii attend a feast, they all bring
Small business advice - Should you incorporate ?
by Trev
I
am frequently asked this question by various individuals who I meet on a
daily basis. They have a small business that was initially set up as a
sole proprietorship, and they are now considering changing the business
to a corporation. Is it worth the time to set up? Could it create
problems? Is it easy? How much does it cost?
by Trev
I
am frequently asked this question by various individuals who I meet on a
daily basis. They have a small business that was initially set up as a
sole proprietorship, and they are now considering changing the business
to a corporation. Is it worth the time to set up? Could it create
problems? Is it easy? How much does it cost?
Prescribing good health
by Dr. Kartik Shah
New relief for low back pain
There are 3 kinds of people, those who had back ache, those who have back ache, and who will eventually end up having back pain. Considering the intricate muscular, neural and skeletal structure of the human back, it's surprising that more people don't suffer from a daily back ache. The muscles of the back and the bones of
by Dr. Kartik Shah
New relief for low back pain
There are 3 kinds of people, those who had back ache, those who have back ache, and who will eventually end up having back pain. Considering the intricate muscular, neural and skeletal structure of the human back, it's surprising that more people don't suffer from a daily back ache. The muscles of the back and the bones of
The Importance of Project Planning
by Perry
To achieve life goals
A lot of project management articles talk about how to use the methodology in business, there's nothing wrong with that, but today I'm going to talk about how project management can help you achieve success in your life goals.
How to know you need help?
For the most part, I know when people need help, and I need help, when
by Perry
To achieve life goals
A lot of project management articles talk about how to use the methodology in business, there's nothing wrong with that, but today I'm going to talk about how project management can help you achieve success in your life goals.
How to know you need help?
For the most part, I know when people need help, and I need help, when
Helping to protect the environment
by Maki
Driving Electric
Look at that cool Lotus sports car! Wait, that’s a hybrid?
That was my reaction when I saw the “green” Lotus Evora 414E on its test drive.
This car has an impressive power and acceleration for a hybrid car. Each year car makers are developing more higher-performance electric cars, but existing large, heavy-weight motors do not suit
The Importance of Project Planning
by Perry
Planning the Project
We ended with a plan that needed validation. Here are the tips for doing that quickly and efficiently. whiteboard with a boxes circles and lines that form the Google plan
Review of what you have
You have a work break down structure and you've had a look to see if there are any gaps. If there are, you've filled them. Now you
by Perry
Planning the Project
We ended with a plan that needed validation. Here are the tips for doing that quickly and efficiently. whiteboard with a boxes circles and lines that form the Google plan
Review of what you have
You have a work break down structure and you've had a look to see if there are any gaps. If there are, you've filled them. Now you
In The Swing
by Clive
Ball on Bridge
This is a golf rules question about what happens if your shot ends up on a bridge when the bridge spans a ditch that is a hazard. Are you allowed a free drop off the path – the bridge - or are you counted as being in the hazard because the path is on a bridge crossing the ditch and therefore you have to drop under penalty?
Brian
I have to be honest Brian,
Helping to protect the environment
by Maki
Squeeze More From Every Drop
How much do you think of water as a “precious resource”? Of course I appreciate water after a long, hot day on my first sip to quench my thirst. But we hear much stronger calls to “conserve water”. Water is so easily available at home, there’s tons of water in the ocean and lakes, it even rains all the time in Vancouver!
In The Swing
by Clive
Footwork
Much – too much – is made of footwork in the golf swing. There are two classic, commonly made mistakes concerning the feet, each with an explainable cause.
The first mistake is what I call the exaggerated-left-heel-raise. This is where the player lifts their left heel straight up on the backswing, and are almost on tippy-toe. It is a very unnatural move, so I
The Importance of Project Planning
by Perry
How much is enough
In my opinion, initiation isn’t complete until the plan is signed off. It seems that one of the lessons project managers take some time to learn is that phases aren’t usually cut and dried. You learn something every step along the way that opens up questions about the step before.
This isn’t a failure of the methodology; it’s
Helping to protect the environment
by Maki
Sustainable Hollywood
Have you thought about the amount of energy used to make the movies we enjoy? For example, sets require lots of wood, bright lights, and air conditioning to cool them. Sustainability and care for the environment is a hot topic now, but where does the entertainment industry play in this?
Recently, I have been intrigued by the
In The Swing
by Clive
Two questions that each demand similar answers, so I thought I would address them together…
Lost my swing after taking a break from golf for a month?
“So, I've been busy these days so I had to take a break from playing golf because of school work, however after a month I went to the practicing range and I lost my feel and my swing. It felt really weird to swing the golf
Small Business Accounting: How to Choose an Accountant
A small business is an enterprise that is usually small in scale in terms of number of employees and/or sales revenues. A large majority of the businesses in the United State are small business. These businesses are usually registered as sole proprietor, meaning one individual owns it, or partnership, meaning 2 or more people owns the business.
One of the problems facing a small business is in terms of accounting. With the limitation in funds, some accounting is done by the business owner. The entrepreneur is tasked to run the business and at the same time handles the day-to-day accounting requirements of the company. Because of this, the company is often penalized by the government for late payment of taxes, late submission of tax documents and at times, non-submission of tax forms. Also, the business can also be penalized for erroneous computations of tax dues. The business owner has his/her hands full with running the business that handling the accounting requirements can be turned over to another person.
A business owner can hire an in-house accountant or he/she can outsource the small business accounting work to a CPA firm like Desert Rose Tax & Accounting. An outsourced accountant can sometimes be more beneficial than hiring an employee because it is less expensive to outsource than to hire. Also, the outsourced accountant doesn't need a designated space while an in-house needs his/her own space in the office.
In choosing an accountant to handle small business accounting for the company, some tips can be useful. Before opening a business, the business owner must have a ready accountant. Since a CPA requires a license before he/she can practice the profession, one has to make sure that he/she has a license. The accountant must have experience in the kind of industry the business is in.
Also in a small business accounting setup, before hiring an outside CPA make sure that one knows how much the accountant charges. Fees charged by CPA firms can vary widely. It is good practice to compare the accountant fees with industry standards. The accountant must be able to fill the needs of the company. Before hiring an accountant, one has to interview at least 3 or more prospective accountants so one can compare which among the three will best serve the company's purpose.
In handling the accounting needs of the company, the business owner must ask the prospective accountant about other possible services he/she can offer to the company like sales tax and payroll tax reporting services. Some Certified Public Accountants offer business advice to help the enterprise grow.
Also, the accountant best fitted to handle the small business accounting is the CPA whose accounting firm is also small. Accountants who own small firms understand how small businesses are run. They also have the time and resources to share with the business owner. It's one thing to have a fancy degree in business and another to have practical experience running a small business. In the event that the business owner sells the business, the accountant must be good enough to discuss with the owner how to go about with the sale so that tax liabilities are minimized.
Prior to signing up an accountant for the small business accounting, the business owner must ask the accountant for client references so that the owner can investigate. One must also make sure that the accountant establishes a business relationship with the owner, meaning the accountant has time to visit the company every now and then rather than just seeing him/her only when it's tax filing season.
One of the problems facing a small business is in terms of accounting. With the limitation in funds, some accounting is done by the business owner. The entrepreneur is tasked to run the business and at the same time handles the day-to-day accounting requirements of the company. Because of this, the company is often penalized by the government for late payment of taxes, late submission of tax documents and at times, non-submission of tax forms. Also, the business can also be penalized for erroneous computations of tax dues. The business owner has his/her hands full with running the business that handling the accounting requirements can be turned over to another person.
A business owner can hire an in-house accountant or he/she can outsource the small business accounting work to a CPA firm like Desert Rose Tax & Accounting. An outsourced accountant can sometimes be more beneficial than hiring an employee because it is less expensive to outsource than to hire. Also, the outsourced accountant doesn't need a designated space while an in-house needs his/her own space in the office.
In choosing an accountant to handle small business accounting for the company, some tips can be useful. Before opening a business, the business owner must have a ready accountant. Since a CPA requires a license before he/she can practice the profession, one has to make sure that he/she has a license. The accountant must have experience in the kind of industry the business is in.
Also in a small business accounting setup, before hiring an outside CPA make sure that one knows how much the accountant charges. Fees charged by CPA firms can vary widely. It is good practice to compare the accountant fees with industry standards. The accountant must be able to fill the needs of the company. Before hiring an accountant, one has to interview at least 3 or more prospective accountants so one can compare which among the three will best serve the company's purpose.
In handling the accounting needs of the company, the business owner must ask the prospective accountant about other possible services he/she can offer to the company like sales tax and payroll tax reporting services. Some Certified Public Accountants offer business advice to help the enterprise grow.
Also, the accountant best fitted to handle the small business accounting is the CPA whose accounting firm is also small. Accountants who own small firms understand how small businesses are run. They also have the time and resources to share with the business owner. It's one thing to have a fancy degree in business and another to have practical experience running a small business. In the event that the business owner sells the business, the accountant must be good enough to discuss with the owner how to go about with the sale so that tax liabilities are minimized.
Prior to signing up an accountant for the small business accounting, the business owner must ask the accountant for client references so that the owner can investigate. One must also make sure that the accountant establishes a business relationship with the owner, meaning the accountant has time to visit the company every now and then rather than just seeing him/her only when it's tax filing season.
Small Business Guide in Hiring an Accountant
An accountant is a necessity for any business. Huge corporations may have lesser problems finding one but small businesses might need more effort to hire this professional. How do you choose and hire the suitable accountant for the accounting needs of your small business? Here are some guidelines that you might find helpful for this task.
• Ask for references from your lawyer, banker, or business colleagues. It's either you will be hiring a person or an agency. Check how much work will your company do and the accountant will do.
• Interview the referrals. Here are the things you need to know during the interview:
-Services to render. What will be the scope of the accounting service? The common inclusions are tax and auditing services. Know if bookkeeping, management consulting, business planning, and other specialized financial and accounting services are also part of the offer. Ensure also that they have experience in working with small businesses and if they are suited to your company's needs.
-Personality. Being compatible with the accountant can enhance the working relationship and make the output a lot better. Ensure that the people you meet at the accounting firm would be the same people doing the services for you. Clarify this matter from the start when you contract the agency's services. To assess the competency and compatibility of the accountant, you may ask how he or she will handle a situation relevant to what is happening or might happen in your business.
-Fees. This aspect should be accomplished upfront. Make this as clear as possible. Some accountants charge by the hour while others work on a monthly basis. Costs, however, should not be your sole reason in choosing. Some charges more because they are more experienced and skilled while others charge littler because they are not as experienced. Make sure that you base your judgments by considering all relevant things.
• After choosing, draft the agreement. All details should be clearly seen at the agreement letter. State properly the statements included returns, fees to be charged, and others. A well-written agreement will prevent any misunderstandings in the future. This also ensures that expectations of both parties are met.
• Make your own assignment. Ensure that you'd not just hand the accountant records and loose receipts. Have a record of your income and expenses and the details that goes with the transactions. This helps your accountant work faster which means lower fees on your part.
• Regularly meet with your accountant. Review the financial statements and assess problems if there are any. You should know where your money is going. A good accountant should not only be concerned with preparing financial statements but should also be able to suggest ways to cut expenses and provide ideas and answers to questions you may have.
• Ask for references from your lawyer, banker, or business colleagues. It's either you will be hiring a person or an agency. Check how much work will your company do and the accountant will do.
• Interview the referrals. Here are the things you need to know during the interview:
-Services to render. What will be the scope of the accounting service? The common inclusions are tax and auditing services. Know if bookkeeping, management consulting, business planning, and other specialized financial and accounting services are also part of the offer. Ensure also that they have experience in working with small businesses and if they are suited to your company's needs.
-Personality. Being compatible with the accountant can enhance the working relationship and make the output a lot better. Ensure that the people you meet at the accounting firm would be the same people doing the services for you. Clarify this matter from the start when you contract the agency's services. To assess the competency and compatibility of the accountant, you may ask how he or she will handle a situation relevant to what is happening or might happen in your business.
-Fees. This aspect should be accomplished upfront. Make this as clear as possible. Some accountants charge by the hour while others work on a monthly basis. Costs, however, should not be your sole reason in choosing. Some charges more because they are more experienced and skilled while others charge littler because they are not as experienced. Make sure that you base your judgments by considering all relevant things.
• After choosing, draft the agreement. All details should be clearly seen at the agreement letter. State properly the statements included returns, fees to be charged, and others. A well-written agreement will prevent any misunderstandings in the future. This also ensures that expectations of both parties are met.
• Make your own assignment. Ensure that you'd not just hand the accountant records and loose receipts. Have a record of your income and expenses and the details that goes with the transactions. This helps your accountant work faster which means lower fees on your part.
• Regularly meet with your accountant. Review the financial statements and assess problems if there are any. You should know where your money is going. A good accountant should not only be concerned with preparing financial statements but should also be able to suggest ways to cut expenses and provide ideas and answers to questions you may have.
A good accountant may save you more than you can think of when done effectively and systematically. Working for a Nashville accounting firm, I believe an accountant is a lifetime partner for any entrepreneur to keep a great business going.
Small Business Accounting - Undergoing the Face of Change
Individuals are learning that a way forward is clearly up to themselves, it is no longer practicable to expect that the path laid by big business is the correct one. No longer can we allow big business to pressure our governments into policy creation that serves only a few. Those individuals who are currently enjoying the handouts and privileges from an alliance with big corporations can now expect to enjoy a quick death along with them.
We are now moving forward at an incredible pace and we are seeing a changing of the guard as small business once again returns to the forefront.
Small Business comes directly from the family, and out of the family comes a desire to nurture, a desire to give without the need to make another suffer in the process. Because of this the world of tomorrow will be a far different place than where we sit right now, change may be slow at times but as momentum is gathering we are already starting to see the impact this is having in our communities.
Small Business Finance
As part of this change we have realized that the way we do business, the way we account for our activities can no longer be done using the same mentality employed by the corporate giants.
For decades these same corporate identities have given us accounting methods and programs born out of their own importance, and from their own system of accounting. As we have recently learnt with so many of them going down the drain their method of accounting is no longer working, we need a method that gives power back to small business and back into the hands of mum's and dads. We can no longer sit back and continue to allow big business to dictate to us telling us what we should or should not be doing, because in the end if we allow this to continue we will condemn ourselves to join with their mass extinction.
A New Generation of Software
The biggest complaint is that traditional accounting software programs are so bulky and so unnatural in their approach that the user becomes more confused and more anxious with every use. This has seen an increase in small business failing to satisfactory comply with government regulations, and an increase in inaccurate taxation reporting, simply because the owner has lost confidence in what they are doing with their business finances.
For the most part the average owner starts out with an expectation of meeting their taxation obligations, however they find themselves bogged down with inefficient software and under a mountain of useless reports.
Accounting Systems of tomorrow need to be developed by small businesses for small business, and these programs need to be designed with simplicity in mind. The reason behind this line of thinking is clear, we have learnt that the average user of these types of programs are not accountants and they have no desire to become one. I point this out as an obvious observation, however this simple truth has been overlooked by corporate software developers for the past 3 or 4 decades.
We are now moving forward at an incredible pace and we are seeing a changing of the guard as small business once again returns to the forefront.
Small Business comes directly from the family, and out of the family comes a desire to nurture, a desire to give without the need to make another suffer in the process. Because of this the world of tomorrow will be a far different place than where we sit right now, change may be slow at times but as momentum is gathering we are already starting to see the impact this is having in our communities.
Small Business Finance
As part of this change we have realized that the way we do business, the way we account for our activities can no longer be done using the same mentality employed by the corporate giants.
For decades these same corporate identities have given us accounting methods and programs born out of their own importance, and from their own system of accounting. As we have recently learnt with so many of them going down the drain their method of accounting is no longer working, we need a method that gives power back to small business and back into the hands of mum's and dads. We can no longer sit back and continue to allow big business to dictate to us telling us what we should or should not be doing, because in the end if we allow this to continue we will condemn ourselves to join with their mass extinction.
A New Generation of Software
The biggest complaint is that traditional accounting software programs are so bulky and so unnatural in their approach that the user becomes more confused and more anxious with every use. This has seen an increase in small business failing to satisfactory comply with government regulations, and an increase in inaccurate taxation reporting, simply because the owner has lost confidence in what they are doing with their business finances.
For the most part the average owner starts out with an expectation of meeting their taxation obligations, however they find themselves bogged down with inefficient software and under a mountain of useless reports.
Accounting Systems of tomorrow need to be developed by small businesses for small business, and these programs need to be designed with simplicity in mind. The reason behind this line of thinking is clear, we have learnt that the average user of these types of programs are not accountants and they have no desire to become one. I point this out as an obvious observation, however this simple truth has been overlooked by corporate software developers for the past 3 or 4 decades.
Simple Easy Small Business Accounting Software which is available from EasyAs Accounting Software.
Let me show you a simple easy approach to small business accounting. Lets Face it, many Small Business owners are mums and dads trying to make a living, and the last thing you want is to be spending all your free time in front of the computer. EasyAs, Simple Easy Bookkeeping
Let me show you a simple easy approach to small business accounting. Lets Face it, many Small Business owners are mums and dads trying to make a living, and the last thing you want is to be spending all your free time in front of the computer. EasyAs, Simple Easy Bookkeeping
Accounting Services For Small Business - Four Types of Services to Look For
There is no doubt that doing all tasks for your new business will help it grow. However, it will reach a point where your company will be known by many people. When that moment comes, you will know why delegating duties is essential. When more customers come, the accountants are normally put under pressure. If you have one accountant or none, important money transactions are likely to be omitted or recorded wrongly. Accounting services for small business will be more preferable in case your company is growing fast.
There are four main types of accounting services for small business that you can buy. If you want to purchase all or some of these services you are free to do so. The first crucial service is bookkeeping. Without keeping your books of accounts properly, your accountants will have a difficult time tracking past transactions. When looking for bookkeepers, in USA, be sure to focus more on registered accountancy firms.
This is because you only want legal accounting services for small business. There are countless companies offering automated or manual bookkeeping. Some of the services they offer include recording accounts payables and accounts receivables, task reporting, producing annual tax projections and financial analysis. Another area where an independent accountancy firm can chip in is the management of business credit files.
Many entrepreneurs fail because of their inability to separate business and personal money matters. Providers of accounting services for small business will not only take charge of your business credit file. They will also offer you free financial advice. Their actual roles will include monitoring your credit behavior and reporting it to the business credit bureaus. When a company borrows a loan, lenders deal with the owner personally. If it defaults, the credit bureaus taint the owner's credit score.
You want to avoid this as it will decrease your probability of receiving more business credit in the future. By having someone working from a remote office to control your credit reporting, you can focus on paying your bills on time. The third accounting services for small business include tax reporting. Although you have an accountant, he or she may not be knowledgeable about reporting tax returns.
They can therefore put your company at risk of facing IRS penalties. To solve this problem, you should simply outsource tax work to a third-party that owns a separate firm. Normally, third-party firms own big teams of accredited accountants and this is why they accept all types of clerical work. The last accounting services for small business that you can find useful entails updating books and releasing financial statements.
Again you must know that it is not all accountants who can update your books manually or by a computer. Thus assigning your task to a team can assure you success. Outsourcing office work to self-employed accountants is not difficult. You can now use the internet to choose a very reliable team in the country. Some providers of accounting services for small business own large businesses that operate in the entire country. If you want no regrets then hire highly reputable and reliable businesses.
There are four main types of accounting services for small business that you can buy. If you want to purchase all or some of these services you are free to do so. The first crucial service is bookkeeping. Without keeping your books of accounts properly, your accountants will have a difficult time tracking past transactions. When looking for bookkeepers, in USA, be sure to focus more on registered accountancy firms.
This is because you only want legal accounting services for small business. There are countless companies offering automated or manual bookkeeping. Some of the services they offer include recording accounts payables and accounts receivables, task reporting, producing annual tax projections and financial analysis. Another area where an independent accountancy firm can chip in is the management of business credit files.
Many entrepreneurs fail because of their inability to separate business and personal money matters. Providers of accounting services for small business will not only take charge of your business credit file. They will also offer you free financial advice. Their actual roles will include monitoring your credit behavior and reporting it to the business credit bureaus. When a company borrows a loan, lenders deal with the owner personally. If it defaults, the credit bureaus taint the owner's credit score.
You want to avoid this as it will decrease your probability of receiving more business credit in the future. By having someone working from a remote office to control your credit reporting, you can focus on paying your bills on time. The third accounting services for small business include tax reporting. Although you have an accountant, he or she may not be knowledgeable about reporting tax returns.
They can therefore put your company at risk of facing IRS penalties. To solve this problem, you should simply outsource tax work to a third-party that owns a separate firm. Normally, third-party firms own big teams of accredited accountants and this is why they accept all types of clerical work. The last accounting services for small business that you can find useful entails updating books and releasing financial statements.
Again you must know that it is not all accountants who can update your books manually or by a computer. Thus assigning your task to a team can assure you success. Outsourcing office work to self-employed accountants is not difficult. You can now use the internet to choose a very reliable team in the country. Some providers of accounting services for small business own large businesses that operate in the entire country. If you want no regrets then hire highly reputable and reliable businesses.
Business Accounting Services helps many companies cut costs. Amitaabh heads a leading Accounting Outsourcing Service that caters to small and medium businesses worldwide with a structured process to ensure client success.
Easy Small Business Accounting Practices
If you're trying to figure out how to handle small business accounting jobs and responsibilities for your business there is a lot of information that you need to keep track of. Whether you're using a piece of software or not to keep track of your financial issues, there are several things that are going to be important. Preparing a general ledger, revenue accounts, balance sheet, and income statement are all crucial parts of small business accounting jobs.
The General Ledger
The first part about using your accounting employment practices effectively is creating a general ledger of accounts. This general ledger is crucial in any accounting careers as it is the first place where debits and credits will take place. Whenever you have expenses that need to be added up or revenue accounts that need to be totaled, the general ledger keeps track of both.
Deciding on the revenue accounts and expense accounts that go into your general ledger is another matter. There are several ways that a business can approach this issue, but the best way is to itemize each revenue stream so that all of the revenue accounts can be seen in a clearly organized manner. For example, some of the revenue accounts that every small business will want to consider having in their general ledger include labor sales or even parts and equipment sales. The basic idea here is that the revenue should be broken down into categories. Creating T-accounts for these revenue accounts if using a manual accounting method is important; software programs will probably have a different method of organization.
The same principle applies to expense accounts, however. Your accounting employment practices should ideally include expense accounts on your general ledger such as supplies expense, payroll expense, freight and delivery expense, and advertising expense among many other possibilities.
Balance Sheet and Income Statement
The balance sheet and income statement are two of the most important financial statements of any business; these show the net worth and profit margins of a company. The balance sheet is composed of asset totals, liability totals as well as owners equity. The general formula that you're dealing with here in your accounting careers is "Assets - Liabilities = Owners Equity."
On the balance sheet, the cash balance of the business needs to be recorded along with several other important factors, including inventory, equipment, and any other business furniture that you have. In contrast, liabilities should include your accounts payable transactions, or the money that the business owes such as a bank loan. By subtracting the liabilities from the total assets you should arrive at the total net worth of the business or owners equity.
In contrast, a business' income statement should be a listing of all expenses and revenues to arrive at the business' bottom line or profitability. There are several ways that an income statement of a business can be constructed, including the single step or multi-step approach. Even though both of these methods are different, a business should arrive at the same total or bottom line using each one.
As you can see, creating a general ledger consisting of revenue and expense accounts in order to develop your business' balance income statement and balance sheet is crucial. Whether you are just starting out in your accounting careers using these financial statement methods or you're thinking about using software to take care of the financial matters of your business, keeping track of the net worth and profitability of a business is absolutely needed.
The General Ledger
The first part about using your accounting employment practices effectively is creating a general ledger of accounts. This general ledger is crucial in any accounting careers as it is the first place where debits and credits will take place. Whenever you have expenses that need to be added up or revenue accounts that need to be totaled, the general ledger keeps track of both.
Deciding on the revenue accounts and expense accounts that go into your general ledger is another matter. There are several ways that a business can approach this issue, but the best way is to itemize each revenue stream so that all of the revenue accounts can be seen in a clearly organized manner. For example, some of the revenue accounts that every small business will want to consider having in their general ledger include labor sales or even parts and equipment sales. The basic idea here is that the revenue should be broken down into categories. Creating T-accounts for these revenue accounts if using a manual accounting method is important; software programs will probably have a different method of organization.
The same principle applies to expense accounts, however. Your accounting employment practices should ideally include expense accounts on your general ledger such as supplies expense, payroll expense, freight and delivery expense, and advertising expense among many other possibilities.
Balance Sheet and Income Statement
The balance sheet and income statement are two of the most important financial statements of any business; these show the net worth and profit margins of a company. The balance sheet is composed of asset totals, liability totals as well as owners equity. The general formula that you're dealing with here in your accounting careers is "Assets - Liabilities = Owners Equity."
On the balance sheet, the cash balance of the business needs to be recorded along with several other important factors, including inventory, equipment, and any other business furniture that you have. In contrast, liabilities should include your accounts payable transactions, or the money that the business owes such as a bank loan. By subtracting the liabilities from the total assets you should arrive at the total net worth of the business or owners equity.
In contrast, a business' income statement should be a listing of all expenses and revenues to arrive at the business' bottom line or profitability. There are several ways that an income statement of a business can be constructed, including the single step or multi-step approach. Even though both of these methods are different, a business should arrive at the same total or bottom line using each one.
As you can see, creating a general ledger consisting of revenue and expense accounts in order to develop your business' balance income statement and balance sheet is crucial. Whether you are just starting out in your accounting careers using these financial statement methods or you're thinking about using software to take care of the financial matters of your business, keeping track of the net worth and profitability of a business is absolutely needed.
Small Business Accounting Systems
You're beyond the paper and list-keeping stage. Thankfully, your business has grown to a point where you know you will have at least weekly income and expenses. Soon it will be daily. It's already starting to get hard to do your accounting manually and it will only get worse. What do you want to spend the majority of your business day on - accounting for your business, or running it? That's a no-brainer! You need to be making an income for you and your family!
Now it's time to buy that accounting system you've been thinking about. Make it something that doesn't take a CPA to understand, is easy to operate and doesn't take up all your valuable time to set up. Think about these things before you buy:
* If you have employees, you may need a payroll function
* Do you need to track inventory? What method do you use?
* Will the software exchange files with your bank?
* Do you have, or will you need, a tax prep package?
* Are there any unusual accounting requirements for your company or industry?
A HEARTY SOLUTION
There are several good packages out there for the new businessperson who is not an accountant. It is important to note that these packages don't replace the need for a business to seek the assistance of an accountant! In fact many businesses require an outside audit. These software packages will NOT replace that cost, but may help alleviate it by providing the accountant with easy-to-follow record keeping!
These are some good software packages that are readily available. Look them up, compare price and features and see which one best fits your needs on paper. These all have a free trial period, but try to make as good a choice as possible before embarking on that free trial. After all, it takes a while to set up any accounting system and you'd much rather do it only once! That said, the free trials are a valuable way to assure yourself that the accounting software will meet your needs before spending your hard-earned cash. Definitely take advantage. And if the package falls short, try another with your newly adjusted requirements in mind.
Here are the best-rated packages available:
* Peachtree Software is a full-featured accounting system that comes in various "flavors" for specific industries.
* Quickbooks is made by the same people as Quicken and has some of the same look and feel. It's a good beginning accounting software.
* Simply Accounting is another good beginners' choice.
* MYOB Plus is a full-featured accounting software that has a Mac version with an especially good reputation.
* Microsoft Small Business Accounting integrates with your current Office products and gives you a similar look and feel, which could shorten the learning curve.
Now it's time to buy that accounting system you've been thinking about. Make it something that doesn't take a CPA to understand, is easy to operate and doesn't take up all your valuable time to set up. Think about these things before you buy:
* If you have employees, you may need a payroll function
* Do you need to track inventory? What method do you use?
* Will the software exchange files with your bank?
* Do you have, or will you need, a tax prep package?
* Are there any unusual accounting requirements for your company or industry?
A HEARTY SOLUTION
There are several good packages out there for the new businessperson who is not an accountant. It is important to note that these packages don't replace the need for a business to seek the assistance of an accountant! In fact many businesses require an outside audit. These software packages will NOT replace that cost, but may help alleviate it by providing the accountant with easy-to-follow record keeping!
These are some good software packages that are readily available. Look them up, compare price and features and see which one best fits your needs on paper. These all have a free trial period, but try to make as good a choice as possible before embarking on that free trial. After all, it takes a while to set up any accounting system and you'd much rather do it only once! That said, the free trials are a valuable way to assure yourself that the accounting software will meet your needs before spending your hard-earned cash. Definitely take advantage. And if the package falls short, try another with your newly adjusted requirements in mind.
Here are the best-rated packages available:
* Peachtree Software is a full-featured accounting system that comes in various "flavors" for specific industries.
* Quickbooks is made by the same people as Quicken and has some of the same look and feel. It's a good beginning accounting software.
* Simply Accounting is another good beginners' choice.
* MYOB Plus is a full-featured accounting software that has a Mac version with an especially good reputation.
* Microsoft Small Business Accounting integrates with your current Office products and gives you a similar look and feel, which could shorten the learning curve.
Online Small Business Accounting Services for Improved Accuracy
It is quite a challenge to run a small business these days and owners have to wear many hats in order to get the job done. When you are taking it upon yourself to handle a lot of tasks, you are bound to mess up at some point, and if an error occurs with your accounts it can be very expensive. Additionally, fixing such errors wastes valuable time that you could be using to manage key administrative issues that are vital to your business.
Owners often face a dilemma in this situation as they cannot afford to hire a full-time professional accountant with their limited resources. This is the precise reason that SaaS models like small business accounting services and payroll accounting systems are becoming more and more popular with small business owners. Following are some of the benefits of such accounting services.
Additional Security
Use of the Internet's increased security modules ensure your data is safe and secure so you don't have to worry about unauthorized access, manipulation or theft. This is a common occurrence when your data is stored at your premises and can be accessed by anyone making your sensitive business information vulnerable to theft and manipulation. Since the reputation of these small business accounting services depends on safeguarding your data, they will go an extra mile to protect it.
Affordable Prices
These accounting services are far more affordable and accurate than a professional accountant hired locally. The online accounting services provide solutions to a large number of clients reducing their costs per client and making it more affordable to the marketplace. This is a classic win-win scenario for small business owners as they can get quality, reliable services at reasonable prices. At the same time, the switch from in-house accounting to online accounting enables employers to focus on more productive areas of their businesses.
Ease of Use
One added advantage of small business accounting services is that they are less complicated than your everyday accounting software which at times can be overly complex for the average business owner. You have the ease of sending your data automatically by email, or you can scan documents like payroll time sheets and then send them by email. Another advantage offered by most of the accounting services providers is the availability of a live professional 24/7 via online chat or email for any problem that you may run in to.
Owners often face a dilemma in this situation as they cannot afford to hire a full-time professional accountant with their limited resources. This is the precise reason that SaaS models like small business accounting services and payroll accounting systems are becoming more and more popular with small business owners. Following are some of the benefits of such accounting services.
Additional Security
Use of the Internet's increased security modules ensure your data is safe and secure so you don't have to worry about unauthorized access, manipulation or theft. This is a common occurrence when your data is stored at your premises and can be accessed by anyone making your sensitive business information vulnerable to theft and manipulation. Since the reputation of these small business accounting services depends on safeguarding your data, they will go an extra mile to protect it.
Affordable Prices
These accounting services are far more affordable and accurate than a professional accountant hired locally. The online accounting services provide solutions to a large number of clients reducing their costs per client and making it more affordable to the marketplace. This is a classic win-win scenario for small business owners as they can get quality, reliable services at reasonable prices. At the same time, the switch from in-house accounting to online accounting enables employers to focus on more productive areas of their businesses.
Ease of Use
One added advantage of small business accounting services is that they are less complicated than your everyday accounting software which at times can be overly complex for the average business owner. You have the ease of sending your data automatically by email, or you can scan documents like payroll time sheets and then send them by email. Another advantage offered by most of the accounting services providers is the availability of a live professional 24/7 via online chat or email for any problem that you may run in to.
The Importance of Accounting For Small Businesses
When starting your own small business one of the most important aspects to think about is the accounting process and how you choose to account all of your financial information. It is important to understand that the accounting of your business's financial information needs to be accurate or else your business may not be as successful as intended. Even if you don't like accounting or numbers, there is no way to avoid accounting for a business. The purpose of accounting for a business is to have a record of the receipts and expenditures of it's daily activities. Also, accounting makes it available for the business owners to assess and analyze the business's performance. This will help the owner to decide what improvements they need to make, or what practices to keep doing in order to keep the company at it's successful place.
In order to file for tax returns, apply for a loan to expand your business, or for certain legal purposes, accounting is necessary. Accounting for your small business is also important so you are able to assess your financial performance. The financial statements such as the balance sheet and cash flow statement show financial information that is important in the success of your business. The balance sheet shows how much your business is worth and what your assets are. The cash flow statement shows where the future cash needs of your business are. Without any of these financial statements your business would not be able to account for the revenues and profits made from day to day, which results in mistakes and inaccurate records.
In the tough economic times we are facing today, having accurate accounting is necessary. There are so many firms that can assist you in accounting for your small business. So many small business owners believe that they need to be able to do their own finances and take the accounting in their own manners. However, that surely is not the case. It is much better to hire a firm that is respectable and can help assist your company in the accounting department. That way, while the firm is handling your accounting necessities, you can be improving your business by putting your name out there to draw in more clients, keep a strong relationship with existing clients, and encourage your employees constantly so that they, too, are putting their best efforts towards your company. This will definitely improve your business and help you as the small business owner to feel more confident and less stressed, knowing that your finances are safe with a trusted accounting firm. There are too many instances where small business owners have tried to take accounting into their own hands, and unfortunately have not succeeded in the process. If you want to have a successful business, you have to learn to keep the accounting out of your job task. In addition to hiring an accountant, as the business owner it is important to purchase accounting software, such as QuickBooks. This type of program is where you will be able to keep track of receipts and expenditures and will help make the financial reports for you as well.
If there is one certain fact about small businesses and accounting it is that the staggering failure rate for new businesses, has more to do with bad financial management than almost any other problem. Whether it means the company does not have a successful business plan, their expectations are impracticable, there is no limits on spending, or just bad decisions made in the financial department overall, businesses such as these need to realize the importance of accounting and what a difference it can make for their company. There are a few options small businesses have for improving some of these mistakes. Small business owners need to be aware of how accounting systems work so that they can realize when their finances are successful or in danger, as well as understanding how to make and read a chart of accounts that makes sense to them.
One of the major problems with small business owners and failing to do the accounting for their business is that the businesses grow so fast to the point where the owners do not have time to worry about the accounting part of the business. They get caught up in trying to perfect their customer service, that they do not see the significance in getting the financial aspect of the business up to par. Hopefully, small business owners will begin to realize how important accounting is for the business, and we will see more successful businesses and less failed businesses in the future.
In order to file for tax returns, apply for a loan to expand your business, or for certain legal purposes, accounting is necessary. Accounting for your small business is also important so you are able to assess your financial performance. The financial statements such as the balance sheet and cash flow statement show financial information that is important in the success of your business. The balance sheet shows how much your business is worth and what your assets are. The cash flow statement shows where the future cash needs of your business are. Without any of these financial statements your business would not be able to account for the revenues and profits made from day to day, which results in mistakes and inaccurate records.
In the tough economic times we are facing today, having accurate accounting is necessary. There are so many firms that can assist you in accounting for your small business. So many small business owners believe that they need to be able to do their own finances and take the accounting in their own manners. However, that surely is not the case. It is much better to hire a firm that is respectable and can help assist your company in the accounting department. That way, while the firm is handling your accounting necessities, you can be improving your business by putting your name out there to draw in more clients, keep a strong relationship with existing clients, and encourage your employees constantly so that they, too, are putting their best efforts towards your company. This will definitely improve your business and help you as the small business owner to feel more confident and less stressed, knowing that your finances are safe with a trusted accounting firm. There are too many instances where small business owners have tried to take accounting into their own hands, and unfortunately have not succeeded in the process. If you want to have a successful business, you have to learn to keep the accounting out of your job task. In addition to hiring an accountant, as the business owner it is important to purchase accounting software, such as QuickBooks. This type of program is where you will be able to keep track of receipts and expenditures and will help make the financial reports for you as well.
If there is one certain fact about small businesses and accounting it is that the staggering failure rate for new businesses, has more to do with bad financial management than almost any other problem. Whether it means the company does not have a successful business plan, their expectations are impracticable, there is no limits on spending, or just bad decisions made in the financial department overall, businesses such as these need to realize the importance of accounting and what a difference it can make for their company. There are a few options small businesses have for improving some of these mistakes. Small business owners need to be aware of how accounting systems work so that they can realize when their finances are successful or in danger, as well as understanding how to make and read a chart of accounts that makes sense to them.
One of the major problems with small business owners and failing to do the accounting for their business is that the businesses grow so fast to the point where the owners do not have time to worry about the accounting part of the business. They get caught up in trying to perfect their customer service, that they do not see the significance in getting the financial aspect of the business up to par. Hopefully, small business owners will begin to realize how important accounting is for the business, and we will see more successful businesses and less failed businesses in the future.
Identifying and Selecting Small Business Accounting Services Providers
Buying small business accounting services is very beneficial. These services are provided by self-governing external contractors who have registered businesses. As a small enterprise owner, you may not have time to do the accounting functions perfectly even if you have adequate knowledge and experience. Gradually you will get to a point where you cannot tell the financial position of your business. This means being in a position where you cannot estimate the actual worth of your business. Without knowing the quantity of your company's liabilities and assets, it can be difficult for you to demonstrate your creditworthiness to creditors and suppliers.
Although you can recruit an accountant, doing this will simply add a costly liability to your business. The new accountant will need enough office space, working equipment, monthly salaries, mandatory leaves, health insurance benefits and so on. He or she will also need an orientation process so as to get familiar with your company. Providers of small business accounting services are a cheap liability for your business because they work from their offices. They also do not ask for salary raises, bonuses, health insurance benefits, compulsory leaves and other favors. They do not require office equipment too unless you want them to come and work in your office.
Small business accounting services providers are known by the law as legitimate accountancy firms. They are run just like any other company, meaning that they have qualified employees, accounting software tools, office equipment and furniture among other things. In order to obtain small business accounting services, you have to sign a contract with the providers. They will explain to you about their scope of services and how they are delivered and you will explain to them the nature of your accounting transactions. Among the issues included in the contract include the length of the contract and payment terms.
Many companies that offer small business accounting services give you predetermined payment plans. For instance, some will expect you to pay an hourly rate and others either a fixed or an hourly rate. Whether you prefer to pay a fixed or an hourly rate, you have an obligation to find out the current rates being charged by many outsourced firms. Large outsourced accountancy firms are able to serve many small businesses at the same time for up to a whole year contract. If you are outsourcing accounting work for the first time, you may want to buy small business accounting services for one week or one month.
If the services delivery turns out great, you can start creating longer contracts with your favorite service provider. If you think that there is a vital condition or stipulation missing in a contract, feel free to negotiate for its inclusion with your best outsourced company. Although there are many outsourced companies in the US, you want to deal with a company that has done accounting for many small businesses in the past. Perhaps you can request the contractor you intend to use to give you genuine contact details for clients it has served in past. While small business accounting services are very essential, it is up to you to locate smart and reputable accountancy firms.
Although you can recruit an accountant, doing this will simply add a costly liability to your business. The new accountant will need enough office space, working equipment, monthly salaries, mandatory leaves, health insurance benefits and so on. He or she will also need an orientation process so as to get familiar with your company. Providers of small business accounting services are a cheap liability for your business because they work from their offices. They also do not ask for salary raises, bonuses, health insurance benefits, compulsory leaves and other favors. They do not require office equipment too unless you want them to come and work in your office.
Small business accounting services providers are known by the law as legitimate accountancy firms. They are run just like any other company, meaning that they have qualified employees, accounting software tools, office equipment and furniture among other things. In order to obtain small business accounting services, you have to sign a contract with the providers. They will explain to you about their scope of services and how they are delivered and you will explain to them the nature of your accounting transactions. Among the issues included in the contract include the length of the contract and payment terms.
Many companies that offer small business accounting services give you predetermined payment plans. For instance, some will expect you to pay an hourly rate and others either a fixed or an hourly rate. Whether you prefer to pay a fixed or an hourly rate, you have an obligation to find out the current rates being charged by many outsourced firms. Large outsourced accountancy firms are able to serve many small businesses at the same time for up to a whole year contract. If you are outsourcing accounting work for the first time, you may want to buy small business accounting services for one week or one month.
If the services delivery turns out great, you can start creating longer contracts with your favorite service provider. If you think that there is a vital condition or stipulation missing in a contract, feel free to negotiate for its inclusion with your best outsourced company. Although there are many outsourced companies in the US, you want to deal with a company that has done accounting for many small businesses in the past. Perhaps you can request the contractor you intend to use to give you genuine contact details for clients it has served in past. While small business accounting services are very essential, it is up to you to locate smart and reputable accountancy firms.
10 Ways an Accountant Can Save Your Small Business Money
Big business and big fees. It's a common perception of accountants, particularly if you watch Hollywood movies, but how about smaller businesses. Are there any benefits to investing in the services of an accountant if you run something like a local shop or service company?
The first thing to realise is that accounting firms come in all sizes. You have the large organisations that support major corporations, smaller practices with a few partners and the independent accountants who specialise in supporting smaller local businesses and sole traders. The larger firms can offer a range of experts that specialise in different aspects of accounting and are able to deal with large and complex businesses, and they will charge high fees to reflect this service. Smaller businesses don't need such a level of expensive support, however, as the smaller amount of money flowing in and out of the business means the way it needs to be managed is also that much simpler. That being the case, what can an accountant do for a small business that will make engaging their services worthwhile?
1. Bookkeeping advice. Keeping track of all the day to day transactions allows you to account for the money coming in and out of the business. There are different ways to keep your books, depending on the type and size of the business, and an accountant can advise on which would suit a particular business best. Choosing the right one can save you time and make sure you claim all the expenses you can to reduce your tax bill. If you really have a problem doing this yourself, many accountants will be able to offer this service as well.
2. Cashflow Advice. If you get your cashflow wrong you can actually got out of business. It's all well and good having orders in the pipeline for the coming year, but if you haven't got cash in the bank to pay the bills that are due right now, you're still in trouble. An accountant can help you plan properly to check your cashflow is keeping up with expenses, and if it isn't, to spot the problems early enough to give you a chance to head them off.
3. Personal financial advice. The whole point of being in business is to make a good living from it. An accountant can advise you exactly what you can take from the business and when to ensure you get the most from your hard work.
4. Cost Control. Every business has overheads and bills to pay. An accountant can look at the way your business is running, see where the money is being spent and advise you on ways to keep those costs to a minimum.
5. Business Planning. Accountants are involved in many types of business and see them at all stages, from start-ups to long established corporations. Because of this they are able to bring a wealth of experience to look ahead at how your business could develop, and provide guidance on how to manage your financial growth.
6. Tax Planning. Tax regulations change all the time as each budget brings a new round of politically motivated updates. Accountants keep up to date with all these changes and are able to advise you on how they affect your own particular business. It may be a change on the rate that means you have to put more money aside, or it could be a new allowance you can take advantage of. Either way, you could save money by avoiding a penalty for not being able to pay on time, or by benefiting from a change you may not have been aware of.
7. Annual reporting and returns. These are a legal requirement and you will be fined if you are late submitting them, or don't actually bother. The fee an account charges for completing the returns on your behalf is much less than it will cost you if you get this wrong.
8. Knowing where you stand. A clear picture of your financial situation allows you to make sensible and timely decisions. Many people need help with reading their financial statements, such as Profit and Loss and Balance sheets, and making good choices and plans based on what they tell you is crucial to the prosperity of a business.
9. Business Structure. As businesses change and grow, the way they are structured have a big influence on the tax that becomes liable and how much the business owner can take as an income. There are pros and cons to being a sole trader, in a partnership or trading as a limited company, and which is best for you will depend on the kind of business you run and where you plan to take it in the future. An accountant will provide you with the facts and information to help you decide which is best for your own circumstances.
10. Time Saving. Running a business is a big commitment. Getting the finances right is crucial, but it does take time. If you are a top class salesperson you are far better using your time to bring in more business than sitting at a desk with a calculator working through the books. In the early days you may find that money is so tight you feel you can't afford the investment needed to work with an accountant, but think carefully about this. For all the reasons stated above an accountant can help you make the most of the money you do make, and it will free you up to make even more of it.
It is rare to find the money you spend on the services of an accountant is not more than repaid in the ways they can keep on the right track, minimise the tax you pay, and keep you from making costly mistakes.
The first thing to realise is that accounting firms come in all sizes. You have the large organisations that support major corporations, smaller practices with a few partners and the independent accountants who specialise in supporting smaller local businesses and sole traders. The larger firms can offer a range of experts that specialise in different aspects of accounting and are able to deal with large and complex businesses, and they will charge high fees to reflect this service. Smaller businesses don't need such a level of expensive support, however, as the smaller amount of money flowing in and out of the business means the way it needs to be managed is also that much simpler. That being the case, what can an accountant do for a small business that will make engaging their services worthwhile?
1. Bookkeeping advice. Keeping track of all the day to day transactions allows you to account for the money coming in and out of the business. There are different ways to keep your books, depending on the type and size of the business, and an accountant can advise on which would suit a particular business best. Choosing the right one can save you time and make sure you claim all the expenses you can to reduce your tax bill. If you really have a problem doing this yourself, many accountants will be able to offer this service as well.
2. Cashflow Advice. If you get your cashflow wrong you can actually got out of business. It's all well and good having orders in the pipeline for the coming year, but if you haven't got cash in the bank to pay the bills that are due right now, you're still in trouble. An accountant can help you plan properly to check your cashflow is keeping up with expenses, and if it isn't, to spot the problems early enough to give you a chance to head them off.
3. Personal financial advice. The whole point of being in business is to make a good living from it. An accountant can advise you exactly what you can take from the business and when to ensure you get the most from your hard work.
4. Cost Control. Every business has overheads and bills to pay. An accountant can look at the way your business is running, see where the money is being spent and advise you on ways to keep those costs to a minimum.
5. Business Planning. Accountants are involved in many types of business and see them at all stages, from start-ups to long established corporations. Because of this they are able to bring a wealth of experience to look ahead at how your business could develop, and provide guidance on how to manage your financial growth.
6. Tax Planning. Tax regulations change all the time as each budget brings a new round of politically motivated updates. Accountants keep up to date with all these changes and are able to advise you on how they affect your own particular business. It may be a change on the rate that means you have to put more money aside, or it could be a new allowance you can take advantage of. Either way, you could save money by avoiding a penalty for not being able to pay on time, or by benefiting from a change you may not have been aware of.
7. Annual reporting and returns. These are a legal requirement and you will be fined if you are late submitting them, or don't actually bother. The fee an account charges for completing the returns on your behalf is much less than it will cost you if you get this wrong.
8. Knowing where you stand. A clear picture of your financial situation allows you to make sensible and timely decisions. Many people need help with reading their financial statements, such as Profit and Loss and Balance sheets, and making good choices and plans based on what they tell you is crucial to the prosperity of a business.
9. Business Structure. As businesses change and grow, the way they are structured have a big influence on the tax that becomes liable and how much the business owner can take as an income. There are pros and cons to being a sole trader, in a partnership or trading as a limited company, and which is best for you will depend on the kind of business you run and where you plan to take it in the future. An accountant will provide you with the facts and information to help you decide which is best for your own circumstances.
10. Time Saving. Running a business is a big commitment. Getting the finances right is crucial, but it does take time. If you are a top class salesperson you are far better using your time to bring in more business than sitting at a desk with a calculator working through the books. In the early days you may find that money is so tight you feel you can't afford the investment needed to work with an accountant, but think carefully about this. For all the reasons stated above an accountant can help you make the most of the money you do make, and it will free you up to make even more of it.
It is rare to find the money you spend on the services of an accountant is not more than repaid in the ways they can keep on the right track, minimise the tax you pay, and keep you from making costly mistakes.
Easy Tips and Tricks to Get Small Business Accounting Right
Making mistakes in your accounting can have serious implications for any business, such as significant fines for suspected tax evasion. For a large corporation, this can damage both the finances and the reputation of the company. For a small business however, it can have a huge impact and possibly even cause the company to go under, if there is not enough money to pay the fines.
Good accounting is therefore essential right from the very start. Many small business owners believe that they do not need to do any kind of accounting, or do only basic bookkeeping, but this is wrong. It is critical for every business, no matter its size, to start accounting from the moment it starts trading. Simply keeping hold of customer receipts and invoices is not enough, the business must set up a simple but thorough system to record all transactions made and to produce reports as and when needed. Getting off to a good start with accounting will set your business up for long-term success.
When you launch your small business, open a separate bank account for it. It is not uncommon for sole traders for example to simply use their personal checking account for their business but this then makes it impossible, or at least extremely difficult and time-consuming, to carry out a reconciliation, which is a check to ensure that the figure your bookkeeping tells you should be in the account is indeed the amount in the account.
Reconciling your books and accounts regularly, such as weekly or monthly, is a great way to avoid accounting errors. This way if the figures do not add up you will have more chance of being able to correct the mistake. Imagine trying to find a small receipt from ten months ago, for example. That is the kind of problem that can occur and be impossible to correct if you only check your books against your bank right before you have to submit your annual tax return.
Good bookkeeping and accounting such as producing monthly cash flow statements not only benefits you when it comes to submitting your tax return, which is much easier when you have all of the necessary figures and documentation already in place, but it also benefits you because you can see if you are overspending on particular items or services, and predict whether you will make a profit or loss. You can also start to see trends, such as seasonal increases and decreases in profit, which may otherwise have gone unnoticed.
Another great tip is to find out if you are entitled to any tax credits as a small business owner. Too many small companies do not realise that they may be able to claim certain expenses such as travel, home office costs and even childcare as untaxed. Be sure to do your research to make sure you are not overpaying.
For small businesses who want to keep their accounts in good order but who perhaps do not have the expertise needed to do their own accounting, there are a couple of options to choose from. It is possible to buy accounting software online that will produce reports for you. These are relatively cheap and easy to use, however the reports are only as good as the figures you enter into them so if you make an error, it is likely to go unnoticed.
Hiring a small business accountant, however, ensures that your accounts will be prepared by a knowledgeable and experienced person who pays meticulous attention to detail. You can opt for a local accountant or, to keep costs down, you can find an accountant online who generally charge lower fees.
It would be highly recommended to any small business to hire a small business accountant as a consultant right from the start of the process, which gives them time to familiarise themselves with your business before the busy period at the end of the tax year. However, you want to ensure that you are working with an accountant who understands your position and can advise on how best to handle your finances, so wherever possible opt for someone who specialises in small business accounting and, preferably, who has already worked with small businesses that are in the same industry as you are. If you live in a large city, accountants tend to be readily available with the necessary background, but if none of your local accountants can offer what you need, then it would be best to find one online, rather than opt for someone who only knows how large corporations work.
Good accounting is therefore essential right from the very start. Many small business owners believe that they do not need to do any kind of accounting, or do only basic bookkeeping, but this is wrong. It is critical for every business, no matter its size, to start accounting from the moment it starts trading. Simply keeping hold of customer receipts and invoices is not enough, the business must set up a simple but thorough system to record all transactions made and to produce reports as and when needed. Getting off to a good start with accounting will set your business up for long-term success.
When you launch your small business, open a separate bank account for it. It is not uncommon for sole traders for example to simply use their personal checking account for their business but this then makes it impossible, or at least extremely difficult and time-consuming, to carry out a reconciliation, which is a check to ensure that the figure your bookkeeping tells you should be in the account is indeed the amount in the account.
Reconciling your books and accounts regularly, such as weekly or monthly, is a great way to avoid accounting errors. This way if the figures do not add up you will have more chance of being able to correct the mistake. Imagine trying to find a small receipt from ten months ago, for example. That is the kind of problem that can occur and be impossible to correct if you only check your books against your bank right before you have to submit your annual tax return.
Good bookkeeping and accounting such as producing monthly cash flow statements not only benefits you when it comes to submitting your tax return, which is much easier when you have all of the necessary figures and documentation already in place, but it also benefits you because you can see if you are overspending on particular items or services, and predict whether you will make a profit or loss. You can also start to see trends, such as seasonal increases and decreases in profit, which may otherwise have gone unnoticed.
Another great tip is to find out if you are entitled to any tax credits as a small business owner. Too many small companies do not realise that they may be able to claim certain expenses such as travel, home office costs and even childcare as untaxed. Be sure to do your research to make sure you are not overpaying.
For small businesses who want to keep their accounts in good order but who perhaps do not have the expertise needed to do their own accounting, there are a couple of options to choose from. It is possible to buy accounting software online that will produce reports for you. These are relatively cheap and easy to use, however the reports are only as good as the figures you enter into them so if you make an error, it is likely to go unnoticed.
Hiring a small business accountant, however, ensures that your accounts will be prepared by a knowledgeable and experienced person who pays meticulous attention to detail. You can opt for a local accountant or, to keep costs down, you can find an accountant online who generally charge lower fees.
It would be highly recommended to any small business to hire a small business accountant as a consultant right from the start of the process, which gives them time to familiarise themselves with your business before the busy period at the end of the tax year. However, you want to ensure that you are working with an accountant who understands your position and can advise on how best to handle your finances, so wherever possible opt for someone who specialises in small business accounting and, preferably, who has already worked with small businesses that are in the same industry as you are. If you live in a large city, accountants tend to be readily available with the necessary background, but if none of your local accountants can offer what you need, then it would be best to find one online, rather than opt for someone who only knows how large corporations work.
Sarah Shore writes for Choose Your Accountant, an online service where you can find small business accounting professionals. For a dedicated small business accountant who really knows your industry, a quick visit to Choose Your Accountant is all that is needed.
4 Tips For Choosing The Perfect Small Business Accountants
Business accountants play an important role in the life of small businesses even though the financial state is no longer as steady as it was in the past. The field where accountants shine vary greatly and it might not be what you are searching for. To be able to find an accountant that can work efficiently for your small enterprise, read this post.
Tip 1: Be Sure You Know Exactly What You Need
It is important that you figure out the assistance of business accountants before you decide to look for one for your business. Several of the specific tasks that they can perform are accounting, tax return and accounting software installation among others. The cost of their services depends on the work that you ask them to conduct. This is the reason why it is vital that you figure out what you would like them to perform in your small enterprise. Carrying this out enables you to figure out what are the characteristics you prefer for a business accountant.
Tip 2: Come up with a Short List
The next step that you must carry out is making a list of names of business accountants that you might like to hire. Internet is the best way you can utilize so that you won't be having any difficulty locating an accountant. In the internet, expect to see many accounting companies and people who provide the services you want. If you want, you can always ask suggestions for an accountant from people you recognize and are close to you like legal professionals, bankers or individuals who have their small business.
Tip 3: Checking their Credentials Is Important
Perform a little research. Most accounting companies have their very own website which you can check out if you want to find out more about them. It is exactly where they post the services they give as well as the price. Make sure that they are associated with accounting companies such as the National Institute of Accountants (NIA) and Chartered Accountants (CA). These companies require their members to update themselves by obtaining continuing professional education. This will also help you in narrowing your short listing to 3 to 5 accountants.
Tip 4: Have a Chat With Them Personally
Small-scale businesses have distinct monetary dynamics when compared with larger businesses. Come across business accountants that know your needs. It will be easier for you to clear up some concerns if you set a personal appointment. Ask pertinent queries such as their approach to monetary difficulties and the reason why you should employ them.
Don't be disappointed if the services they provide are expensive. Instead of the cost, take into account the value. If the service they give you has been useful for your business, then it's definitely a valuable investment.
Tip 1: Be Sure You Know Exactly What You Need
It is important that you figure out the assistance of business accountants before you decide to look for one for your business. Several of the specific tasks that they can perform are accounting, tax return and accounting software installation among others. The cost of their services depends on the work that you ask them to conduct. This is the reason why it is vital that you figure out what you would like them to perform in your small enterprise. Carrying this out enables you to figure out what are the characteristics you prefer for a business accountant.
Tip 2: Come up with a Short List
The next step that you must carry out is making a list of names of business accountants that you might like to hire. Internet is the best way you can utilize so that you won't be having any difficulty locating an accountant. In the internet, expect to see many accounting companies and people who provide the services you want. If you want, you can always ask suggestions for an accountant from people you recognize and are close to you like legal professionals, bankers or individuals who have their small business.
Tip 3: Checking their Credentials Is Important
Perform a little research. Most accounting companies have their very own website which you can check out if you want to find out more about them. It is exactly where they post the services they give as well as the price. Make sure that they are associated with accounting companies such as the National Institute of Accountants (NIA) and Chartered Accountants (CA). These companies require their members to update themselves by obtaining continuing professional education. This will also help you in narrowing your short listing to 3 to 5 accountants.
Tip 4: Have a Chat With Them Personally
Small-scale businesses have distinct monetary dynamics when compared with larger businesses. Come across business accountants that know your needs. It will be easier for you to clear up some concerns if you set a personal appointment. Ask pertinent queries such as their approach to monetary difficulties and the reason why you should employ them.
Don't be disappointed if the services they provide are expensive. Instead of the cost, take into account the value. If the service they give you has been useful for your business, then it's definitely a valuable investment.
In The Swingby CliveAdviceThis past weekend I was at the driving range with my two sons, who are just three and seven years old. I “think” I have done a good job of not pushing them into golf, and responding positively when they ask to go hit balls. In fact, I think there is much greater satisfaction when they ask to go, as opposed to me suggesting it and them agreeing. My three year old is at a
In The Swingby Clive PointsI have managed to keep my mouth shut, and pen quiet, about the FedEx Cup golf playoffs for a year now. But I can no longer. I have always understood what the PGA Tour is trying to do – give a boost to the season after all the major championship trophies have been returned to the trophy case, and, to give additional meaning to the season by creating a playoff run akin to
In The Swingby CliveSplit Grip“CliveThanks for taking my question...I bought your books and DVDs and have enjoyed them greatly...while practicing yesterday, I started out doing the thrust drill and split grip drill with solid contact but when I transitioned to a regular golf swing I hit many of them on the hosel...my assessment is that once I made a full swing I was pulling the club and sliding
In The Swingby CliveInitiating the Downswing“Thanks Clive, I got the DVDs on Thursday and watched them. Your teaching makes a lot of sense. But I am having trouble with the initiation of the downswing. I know you say to straighten the right arm and wrist directly down into the ball. Does that move initiate the downswing, and the body just goes along? Harvey.”Dear Harvey,Yes, you have basically
In The Swingby CliveA Mystical GameAs I say at the beginning of my new book, almost no one lacks an opinion about golf. There are a lot of sports that one can either take or leave, but for some reason the game of golf conjures up more emotion and opinion, regardless of whether you are a player, or not. Some people obsess about the game, and others obsess about maligning it. It is not uncommon to
Equine Accounting and Tax - Who Gets the House?
When an asset owned by a spouse is transferred as a result of divorce, there are no immediate tax consequences to either spouse. The one transferring title to the other spouse does not recognize any gain, even if the home may have appreciated in value since it was purchased. LIkewise, the spouse receiving the home does not recognize any income either. However, the spouse who obtains title to the home steps into the shoes of the other person when it comes to basis (generally the amount of your investment in a property for tax purposes). In effect, the spouse who winds up with the home also winds up with a potential tax bill. When the spouse that has received title to the house later sells the house, the gain on the sale (prior to exclusions) will be calculated using the original basis of the house, not including any payments that you made to your spouse as part of obtaining title. That can mean a hefty tax bill for you.
For example, Mary and John Smith buy a farm during their marriage for $600,000. At the time of divorce, the fair market value of the house is $800,000. Mary pays John $200,000 to obtain sole ownership of the property. Years later, she sells the property for $950,000. She has assumed that she will owe taxes (subject to other tax exclusions) on $150K ($950K less $600K original basis less $200K that she paid to John). Wrong! The $200K that she paid to John is not included in the tax basis of the property so she will owe taxes on $350K.
The "payment" does not just include money that you pay to your spouse. If you agree to receive the farm in the settlement and in exchange your spouse will be allowed to maintain ownership of $200K in a joint bank account, that would treated by the IRS as a payment by you to your spouse. And there are other similar situations that would be treated as a payment by you subsequent to a divorce that would not be included in the basis of the property for purposes of calculating a gain.
What does that mean to you? Your tax professional or attorney needs to make an educated guess at what your future tax liability would be on any payments you make to your spouse in the settlement and include that in the negotiations.
How you plan now can make a big difference to your wallet down the road.
5 Minute Fixes
Tax season was very busy for me this year and there were times that I felt that I didn't have time to breathe. Riding was out of the question and even routine tasks such as grocery shopping and cleaning the house seemed out of reach. One day, I was sitting at my desk daydreaming about what I wish I could be doing (how much time did you waste daydreaming you may well ask!) and I thought about an email newsletter that I get on a regular basis, called the "Profitable Horseman", written by Doug Emerson. At the top, he includes the amount of seconds it's going to take to read the newsletter (always less than a minute). I ALWAYS read his newsletter because I always have at least 42 seconds to spare in my day. 42 seconds later, I have learned something and feel that I've accomplished something worthwhile.
So I applied the same principle to my problem of feeling overwhelmed. What could I do in a relatively short period of time, that wouldn't take unnecessary time out of my schedule or put me further behind and that would give me some feeling of satisfaction? Into my life came the "5 Minute Fix". I started keeping a list of things that I could accomplish in five minutes. It might not be a completed task but a portion of a task that I could accomplish in 5 minutes. Pretty soon, I was using my travel time or time in the grocery store line (I did get there eventually!) to mentally construct this list and to figure out how to break up large tasks into manageable pieces.
People with equine businesses typically spend so much time working at their business that they aren't able to spend a lot of time working on their business. There are things on your business to-do list that you KNOW you should be working on but you just don't have the time. Try the 5 Minute Fix. Here are some tasks that may be on your list that will take no more than 5 minutes to accomplish. Add whatever else is on your list. Once you get started, you'll find creative ways to make even the biggest tasks less imposing.
- Go to the IRS website (www.IRS.gov) and sign up for an EIN (employer identification number). If you are using your Social Security number as the tax identification number for your business, you should get an EIN to limit accessibility to your SS #.
- Email a client to let them know how much you enjoyed working with them today or a new contact how much you enjoyed meeting them.
- Post a success story/photo on Facebook. It's great advertising for your business and a morale builder for current clients or employees.
- Grab all your cc receipts for business expenses for this week/month and write a short description on the back of what the expense is for. This is especially true for meals and entertainment or gift expenses. If you are audited years after you incur the expense, you will probably not remember what the receipt represents and that expense could be disallowed by the IRS.
- Find a Youtube video that is less than 5 minutes that covers a business topic that will help your business grow - anything from using QuickBooks to Social Media marketing.
- Go to the website for your state Farm Bureau, Horseman's Council or Ag Dept - always a good source of information for horse businesses.
My first "fix" was to vacuum a small rug in my hallway - just the rug! No more than 5 minutes including getting the vacuum out and putting it away again. Not a huge deal in the scheme of life but it was something that I accomplished in the time that I had.
This article was mostly written in 5 minute fix fashion (which I hope doesn't dissuade from giving the idea a try).
In The Swingby CliveCollapseIn recent weeks and in significant tournaments we have witnessed two fairly monumental collapses by seasoned, veteran, golf professionals. I think there are perhaps two things we can learn from this; that absolutely anyone can falter, and, pressure is what you decide it is. First, we saw Australian Adam Scott bogey the last four holes at the British Open to hand Ernie
In The Swingby CliveNadir“Clive,I have reviewed the DVDs again. A lot of it is very helpful… I have tried to employ the techniques in the DVD and I’m now breaking 110 occasionally (better than before where I struggled to break 120 consistently).I do appreciate your very analytical approach, the physics, the super-slow motion photography. One aspect of the successful golf swing that you do not
In The Swingby CliveAcceleration (Part 2)Today we continue on the issue of acceleration (versus speed) in the golf swing as it pertains to chipping. While this principle of acceleration is not more important in chipping, I think its abuse rears its ugly head more frequently in chipping. The absolute number two cause of the “duffed” chip shot (number one is trying to hit up or lift the ball) is a
In The Swingby CliveAcceleration (Part 1)Dear Reader: The following question is an important one, and relates to both the full swing and the short game swing. So I have broken my reply into two, with part one appearing this week and part two, relating to the short game aspect, to appear next week. “Dear Clive,I am confused about something.(but it wouldn’t be the first time) connected to swing
In The Swingby CliveDriving DistanceI am the first to downplay the perceived need to drive the ball a long way in order to play good golf. But if you truly feel your game needs more off-the-tee distance let’s at least go about it the right way.There is a very important distinction that needs to be made first of all, and that is between hitting hard and swinging fast. In order to hit the ball a
In The Swingby CliveTournaments“Dear Clive,I am playing in our club championship in a couple of weeks and I was wondering if you had any tips for playing in tournaments? I consider myself a decent player yet I never play tournaments well. John”Dear John,There are lots of things I could say about playing in tournaments, but to me one single piece of advice will have the most effect. Unfortunately
In The Swingby CliveBreaking Putts“Dear Clive, How do I curve my putts like the pros do? When I watch the pros putt, they curve the ball, even when the green doesn't slope. How do I do this too?Rory.”Thanks for your question. Believe me, the last thing any golfer wants to do, tour pros especially, is “curve the ball” on the putting green when it is not supposed to curve. If you see the putt
In The Swingby Clive Ball Position“Hi Clive,I'm just a little confused about ball position in relation to the left foot when using the driver. I know you have said to use only one ball position, and I get that. It is my understanding the driver clubhead strikes the ball (as it sits on the tee) on the upswing just past the bottom of the arc as a result of a downward action. To allow the club
In The Swingby Clive Knees“Dear Clive,I have a bad left knee that will need to be operated on. In the meantime, do you have any advice on how I can put less pressure on my knee when swinging the golf club? Still working on not using too much right hand which amplifies my mistakes left. Bigger and soft grips have made it easier to have relaxed grip, which is ever so important in my game.As always
Mortgages made simple with BrentMortgage Brokers earlier lobbying to the Fed’s helpsThe Office of the Superintendent of Financial institutions (OSFI) has reversed its proposed amendment to require borrowers to re-qualify for their mortgages at renewal. This decision is welcome to realtors, mortgage brokers and especially the homeowners – although many may have not known this proposal was even in
In The Swingby CliveSnap Hook“Clive, Thank you very much for the e book, it is a perfect info piece; I just bought it as part of the package, looking forward to the DVD set. My irons (wedges and long), especially my 4 iron, are getting very good based on hitting down. I tend to hit a great shot and then hook my driver (more like a snap hook). I have had a nasty hook and I am trying to fix it (
In The Swingby CliveWidth“Dear Clive,I purchased your DVD and have a couple of questions:1.) regarding width of golf stance. Should the width vary based on the length of the club? That is, longer clubs = wider stance, shorter clubs = narrow stance. Or, is shoulder width the proper stance width for ALL clubs?2.) regarding ball position. I like the one ball position concept. Jack Nicklaus advocates
Good clients = Good business!
If you own a business, EVERY decision you make impacts your bottom line – whether it be how many employees you have, who designs your website or where your business is located. But one of the most important factors that contribute to the success of your business is your clients. Good clients = Good business! Basically, a good client adds to the process of earning money, helping you achieve your goals and making your job enjoyable for you. So you need to be able to identify and attract good clients. If you are the client, you need to understand that time is your trainer/instructor/barn owner’s livelihood and need to be respectful of that. Make your expectations clear from the beginning and ask if the professional is agreeable to them. If you need to discuss something with the professional, schedule a time to do so. Your professional will enjoy working with you if you make it easier for them to do their job successfully.
So what makes a good client?
A good client is a person who is looking for someone with skills that you have. A hunter jumper rider looking for an instructor is not a good client for a dressage instructor. That example may be obvious but there are some situations that are less obvious but the same principle holds true. Preferences such as working with adults vs. children, amateurs vs. professionals, show competitors vs. those who prefer not to show, focus on the horse vs. the rider, etc. are all factors that need to be considered when matching your skill set to the needs of a client.
Beyond your skills, you need to ask some questions of the client to see if your method of operating is a compatible with the clients’ wishes. Does your client need someone to be proactive for them in arranging their show schedule, vet visits and other details of owning a horse or do they like to do it themselves? If you are a trainer, does your client expect a progress report after each training session or is checking in just once a week OK with them?
Are your fees well within the reach of this client? If not, you will be struggling each month to collect what is due to you or your client may be resentful toward you for charging what they consider to be “expensive” rates.
There are many more dimensions that should be considered in this matching process, depending on the services you offer. But make sure you discuss with each client at least the following subjects - expectations about price, availability, level of service and level of personal involvement.
No one can be all things to all people and especially when you are just starting your business or times are tough, you may be tempted to take on a client who you think may not be a good fit for you. Don’t do it! You will be investing your time (which in many cases = your money) in a relationship that has little chance of succeeding. You run the risk of creating bad will with the client who feels dissatisfied that they didn’t get what they expected out of the relationship. And nothing travels faster in the horse world that someone’s bad opinion.
If you are the client, you need to understand that time is your trainer/instructor/barn owner’s livelihood and need to be respectful of that. Make your expectations clear from the beginning and ask if the professional is agreeable to them. If you need to discuss something with the professional, schedule a time to do so. Your professional will enjoy working with you if you make it easier for them to do their job successfully.
So how do you attract good clients? There are lots of avenues for marketing your business but whatever you choose, be clear about who you are and what you have to offer. When meeting with a prospective client, ask all the questions you need to find out if there is a high probability of success for the relationship or whether the client needs to look elsewhere. If the match doesn’t seem like it’s made in heaven, suggest other professionals that they can contact who you know might better suit their needs. In doing so, you are building good will with that person for the future and with the professional to whom you refer them.
Good clients = Good business!
So what makes a good client?
A good client is a person who is looking for someone with skills that you have. A hunter jumper rider looking for an instructor is not a good client for a dressage instructor. That example may be obvious but there are some situations that are less obvious but the same principle holds true. Preferences such as working with adults vs. children, amateurs vs. professionals, show competitors vs. those who prefer not to show, focus on the horse vs. the rider, etc. are all factors that need to be considered when matching your skill set to the needs of a client.
Beyond your skills, you need to ask some questions of the client to see if your method of operating is a compatible with the clients’ wishes. Does your client need someone to be proactive for them in arranging their show schedule, vet visits and other details of owning a horse or do they like to do it themselves? If you are a trainer, does your client expect a progress report after each training session or is checking in just once a week OK with them?
Are your fees well within the reach of this client? If not, you will be struggling each month to collect what is due to you or your client may be resentful toward you for charging what they consider to be “expensive” rates.
There are many more dimensions that should be considered in this matching process, depending on the services you offer. But make sure you discuss with each client at least the following subjects - expectations about price, availability, level of service and level of personal involvement.
No one can be all things to all people and especially when you are just starting your business or times are tough, you may be tempted to take on a client who you think may not be a good fit for you. Don’t do it! You will be investing your time (which in many cases = your money) in a relationship that has little chance of succeeding. You run the risk of creating bad will with the client who feels dissatisfied that they didn’t get what they expected out of the relationship. And nothing travels faster in the horse world that someone’s bad opinion.
If you are the client, you need to understand that time is your trainer/instructor/barn owner’s livelihood and need to be respectful of that. Make your expectations clear from the beginning and ask if the professional is agreeable to them. If you need to discuss something with the professional, schedule a time to do so. Your professional will enjoy working with you if you make it easier for them to do their job successfully.
So how do you attract good clients? There are lots of avenues for marketing your business but whatever you choose, be clear about who you are and what you have to offer. When meeting with a prospective client, ask all the questions you need to find out if there is a high probability of success for the relationship or whether the client needs to look elsewhere. If the match doesn’t seem like it’s made in heaven, suggest other professionals that they can contact who you know might better suit their needs. In doing so, you are building good will with that person for the future and with the professional to whom you refer them.
Good clients = Good business!
.
In The Swingby CliveHands“Hi Clive,Started (playing golf a) few months back and have improved substantially. Many thanks to your DVDs and book. I have a few questions and wanted check with you.1. During the downswing, at the point of contact with the ball, would the hands be ahead of the ball? Is this because at the address position the butt end of the club is towards the left pant pocket?2.
Mortgages made simple with BrentNational Mortgage Brokers Assoc. warns Fed’s about proposed new refinancing rulesCanada’s mortgage brokers are warning the banking regulator that its proposed mortgage underwriting rules could result in people losing their homes.The brokers are concerned about a number of the potential rules, but the one that worries them most outlines what banks would have to do
In The Swingby Clive Driver Slice“How can I fix my slice in golf? I am a lefty and I always slice my drives. Some go left a little some go left a lot. I don't slice at all or maybe just a little with my irons. What could I be doing wrong? And don't tell me something dumb like go take lessons, just tell me some common problems.Brian”Dear cheeky, I mean, Brian: Of course, you should take lessons,
What's too much and what's not enough?
Most people are happy to hear that they are receiving a refund on their tax returns. But when is a refund too much?
If you had unexpected expenses or had less income than you anticipated, you may receive a refund larger than expected. But if year after year, you are receiving what you would consider a "significant" refund, that's too much. By having excess income tax withheld from your paycheck or making excessive estimated payments, you are, in effect, making an interest free loan to Uncle Sam.
Some people do this intentionally. It's their method of putting money away on a regular basis. If that's your reason, ask your employer or bank if it is possible to set up periodic withdrawals from your paycheck or checking account to be transferred to a savings account or Christmas Club type account. The money will be earning interest (however minimal lately!) and will be accessible to you in case of emergency.
Speak to your Personnel Department or tax preparer and ask about increasing the number of your allowances or decreasing the amount of your estimated payments.
Conversely, when are your tax payments not enough?
If you had an unexpected windfall or your expenses were not what you anticipated, you may end up owing on your tax return. And if the amount of payments that you have made through December 31 are below a certain threshold, you may end up also owing interest and penalty. Again, if this happens infrequently, it's not a big problem. But if year after year, you are accruing interest and penalty, you need to take action. Speak to your Personnel Department or tax preparer and ask about decreasing your allowances or having an additional amount withheld or having the amount of your estimated payments increased.
If your current year payments reach the safe haven threshold compared to your prior year tax liability (that is how much tax was due in total over the course of the year, NOT how much was due with your return), in most cases, you will not incur any penalty or interest on your tax due. Safe haven thresholds vary with your level of income so consult your tax preparer for specific information.
Remember that income taxes are on a pay-as-you-go system. If you won the lottery in January, you can't wait until December to pay taxes on your winnings. If you do, you could owe interest and penalty on that income.
The rules for paying estimated taxes are different for farmers and fishermen than for most businesses so be sure to take those into account.
What could you do what the extra money that you are loaning to Uncle Sam or that you are paying in interest and penalty?
Tax credit vs Tax deduction...
What's a tax credit? What's a tax deduction? Which is "better"?
Simply, a tax deduction reduces your taxable income. A tax credit reduces your tax liability. Let's use a simple example to see the effect of each. In our example, your total income for the year is $80,000. That includes, but isn't limited to, income such as wages, interest and dividends, business income, capital gains and pensions. You are then allowed to take a standard deduction (the amount is determined by your filing status - single, married filing jointly, etc) or itemize your deductions. Common itemized deductions include mortgage interest, charitable contributions and real estate taxes. In our example, your itemized deductions are $12,000. You are then allowed another deduction, in this case called an exemption - also based on your filing status and your tax is calculated based on all of these adjustments.
Total income: $80,000
Itemized Deductions: (12,000)
Subtotal: 68,000
Exemption: ( 3,700)
Taxable Income: 64,300
Using a sample tax rate of 20%, your tax liability would be $12860.
But instead of $12,000,what if your itemized deductions were $15,000? In that case, $80,000 - $15,000 - $3,700 (exemption) = $61,300 taxable income and at 20%, your tax would now be $12260. That additional $3,000 in itemized deductions saved you $600 on your taxes. So a tax deductions reduces your taxable income, which is the basis for calculating what you owe.
A tax credit reduces the tax itself. So in our example of a tax liability of $12860, if you had a tax credit of $500, you would then owe $12360. Common tax credits include the Earned Income Tax Credit, the Child and Dependent Care Credit, the Child Tax Credit and the Retirement Savings Contribution Credit.
The reason that I've dragged you kicking and screaming through this process is because I want you to understand that large tax deductions don't translate into equally large decreases in your taxes. So if you are considering making a large charitable contribution, have your tax preparer crunch the numbers so that you know what effect this will have on your tax liability. This is especially important if you are considering the decision between donating your horse and selling it at a price well below the appraised value.
Before you make any big decisions about discretionary actions that will effect your taxes, be sure to consult with your tax preparer. It's part of their job to help you make the best choices based on your particular circumstances.
Simply, a tax deduction reduces your taxable income. A tax credit reduces your tax liability. Let's use a simple example to see the effect of each. In our example, your total income for the year is $80,000. That includes, but isn't limited to, income such as wages, interest and dividends, business income, capital gains and pensions. You are then allowed to take a standard deduction (the amount is determined by your filing status - single, married filing jointly, etc) or itemize your deductions. Common itemized deductions include mortgage interest, charitable contributions and real estate taxes. In our example, your itemized deductions are $12,000. You are then allowed another deduction, in this case called an exemption - also based on your filing status and your tax is calculated based on all of these adjustments.
Total income: $80,000
Itemized Deductions: (12,000)
Subtotal: 68,000
Exemption: ( 3,700)
Taxable Income: 64,300
Using a sample tax rate of 20%, your tax liability would be $12860.
But instead of $12,000,what if your itemized deductions were $15,000? In that case, $80,000 - $15,000 - $3,700 (exemption) = $61,300 taxable income and at 20%, your tax would now be $12260. That additional $3,000 in itemized deductions saved you $600 on your taxes. So a tax deductions reduces your taxable income, which is the basis for calculating what you owe.
A tax credit reduces the tax itself. So in our example of a tax liability of $12860, if you had a tax credit of $500, you would then owe $12360. Common tax credits include the Earned Income Tax Credit, the Child and Dependent Care Credit, the Child Tax Credit and the Retirement Savings Contribution Credit.
The reason that I've dragged you kicking and screaming through this process is because I want you to understand that large tax deductions don't translate into equally large decreases in your taxes. So if you are considering making a large charitable contribution, have your tax preparer crunch the numbers so that you know what effect this will have on your tax liability. This is especially important if you are considering the decision between donating your horse and selling it at a price well below the appraised value.
Before you make any big decisions about discretionary actions that will effect your taxes, be sure to consult with your tax preparer. It's part of their job to help you make the best choices based on your particular circumstances.
Tax Tips for the Self Employed
This is taken from the IRS website and provides answers to questions that I'm asked on a routine basis. My only addition would be that in #3, many of you may be eligible to file a Schedule F for farmers, rather than a Schedule C.
IRS Tax Tip 2012-16, January 25, 2012
There are many benefits that come from being your own boss. If you work for yourself, as an independent contractor, or you carry on a trade or business as a sole proprietor, you are generally considered to be self-employed.
Here are six key points the IRS would like you to know about self-employment and self- employment taxes:
1.Self-employment can include work in addition to your regular full-time business activities, such as part-time work you do at home or in addition to your regular job.
2.If you are self-employed you generally have to pay self-employment tax as well as income tax. Self-employment tax is a Social Security and Medicare tax primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. You figure self-employment tax using a Form 1040 Schedule SE. Also, you can deduct half of your self-employment tax in figuring your adjusted gross income.
3.You file an IRS Schedule C, Profit or Loss from Business, or C-EZ, Net Profit from Business, with your Form 1040.
4.If you are self-employed you may have to make estimated tax payments. This applies even if you also have a full-time or part-time job and your employer withholds taxes from your wages. Estimated tax is the method used to pay tax on income that is not subject to withholding. If you fail to make quarterly payments you may be penalized for underpayment at the end of the tax year.
5.You can deduct the costs of running your business. These costs are known as business expenses. These are costs you do not have to capitalize or include in the cost of goods sold but can deduct in the current year.
6.To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be indispensable to be considered necessary.
This is taken from the IRS website and provides answers to questions that I'm asked on a routine basis. My only addition would be that in #3, many of you may be eligible to file a Schedule F for farmers, rather than a Schedule C.
IRS Tax Tip 2012-16, January 25, 2012
There are many benefits that come from being your own boss. If you work for yourself, as an independent contractor, or you carry on a trade or business as a sole proprietor, you are generally considered to be self-employed.
Here are six key points the IRS would like you to know about self-employment and self- employment taxes:
1.Self-employment can include work in addition to your regular full-time business activities, such as part-time work you do at home or in addition to your regular job.
2.If you are self-employed you generally have to pay self-employment tax as well as income tax. Self-employment tax is a Social Security and Medicare tax primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. You figure self-employment tax using a Form 1040 Schedule SE. Also, you can deduct half of your self-employment tax in figuring your adjusted gross income.
3.You file an IRS Schedule C, Profit or Loss from Business, or C-EZ, Net Profit from Business, with your Form 1040.
4.If you are self-employed you may have to make estimated tax payments. This applies even if you also have a full-time or part-time job and your employer withholds taxes from your wages. Estimated tax is the method used to pay tax on income that is not subject to withholding. If you fail to make quarterly payments you may be penalized for underpayment at the end of the tax year.
5.You can deduct the costs of running your business. These costs are known as business expenses. These are costs you do not have to capitalize or include in the cost of goods sold but can deduct in the current year.
6.To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be indispensable to be considered necessary.
In The Swingby CliveHalf SwingSomeone asked me this week for a general tip geared toward season beginning practice. In other words, they were looking for something to focus on to get their game into shape for the golf season. I thought for a moment, because I do not like to give knee-jerk answers or offer some random tip out of a hat. It is bad enough that golf magazines do that every issue. I
In The Swingby Clive Percentage“Dear Clive, When I play well, I can drive about 250 yards and can play well with my irons. I just want to know how to play those shots all the time and not 60% of the time. Thanks,Jim”Hi Jim, Your letter caught my attention because I think the answer is something most golfers could benefit from. Your initial reaction to my initial answer may upset you, but I think
Mortgages made simple with BrentBuying a house? Don’t go to the bank use a Mortgage BrokerMetro April 25, 2012I sold my property last week and I’m in a mad scramble to find a new home. With my wish list in hand and a pre-approved mortgage under my belt, I’m confident I’ll eventually find what I’m looking for.Much to the chagrin of my financial planner, a bank employee, I’ve decided to use an
In The SwingBy ClivePlay Your Own GameOften – far too often – the kind of advice I am about to dispense falls on deaf ears. The golf industry has so much in common with the weight-loss industry it is eerie; golfers desperately want to get better, but they want to do it while eating whatever they want. I know pounding a drive is fun, but the sensation is so temporary compared to a good score. I
Mortgages made simple with BrentBank of Canada holds prime steady againCanadian Real Estate Wealth, April 17, 2012A domestic economy regaining ground alongside its U.S. counterpart wasn’t enough stimulus for the Bank of Canada to increase its key overnight rate Tuesday, with the growing threat of global oil prices and uncertainty in Europe encouraging it to maintain the status quo.“Overall,
In The Swingby CliveMore PuttingI have received a number of questions regarding putting, so I am going to try here to cover a few of the most common ones. When it comes to putting, unlike much of the rest of the game, personal preference and feel come in to such a degree that it is difficult to say “you must do this” or “always do that”. Therefore I am going to address questions that I feel do
In The Swingby ClivePuttingIf The Masters tells us nothing else about the game of golf, it certainly tells us the importance of putting.To my dying day I will never understand why the average golfer does not practice his or her putting more – or, at all. It’s fun! What can be nicer than standing on a perfectly manicured putting green, in the sunshine, beverage of your choice nearby, gently
In The Swingby CliveDriver, 3-Wood“Can you explain to me why my 200 dollar driver goes just as far as my 80 dollar 3 wood? 3 wood loft: 15 degrees; driver loft: 10.5. 3 wood shaft length: 42.5; driver shaft length: 46.5. Can it be that I’m way more confident hitting my 3 wood which I never had any problems with, and I’m not confident at all with my driver? What else can be the problem?Pat”Dear
Mortgages made simple with BrentThe banking blunders that snare young people Roma Luciw, Globe & Mail March 27, 2012These are tough times for twentysomethings. Having racked up massive debt, they are leaving school with scant job prospects and an expensive housing market, not to mention uncertain economic conditions.When it comes to bank accounts, something everyone has, the trick is to avoid
In The Swingby CliveRight“Whenever I hit the golf ball with any club it will always go right. I have tried to close the face, aim left a little bit more but it still goes right. Can you tell me what I’m doing wrong?Ryan”Dear Ryan,If all your clubs are going to the right, even with a closed face at address, without doubt there is one common denominator: you are hitting up at the ball.Your address
In The Swingby ClivePhysics“Hi Clive,Do you have something that defines more technically the position of the body relative to the focal point of the swing at the moment of contact with the ball. I was ok with the instruction I guess my expectation was something that describes in more detail how and what, using physics, will get me to "hitting down on the ball. Shawn Clemens talks about the
In The Swingby CliveGeese ControlIt is not unusual to write about eagles, or birds in general, when writing a golf column, but today’s column has a little twist. Many golf courses around the world see their fair share or birdies and eagles, plus what they consider to be more than their fair share of… geese.Geese can be noisy, they can congregate in great numbers around a golf green, but their
Mortgages made simplewith BrentGreat news for consumers as Fed’s direct lenders to standardize penalties and provide more tools and info.After class-action suits and a lake of client tears, the federal government moved Sunday to force banks to clarify their prepayment and penalty terms.“The Code is to ensure that federally regulated financial institutions (lenders) provide enhanced information in
In The Swingby CliveSandI was playing golf on the Wii today. It was only the second time I have even played Wii golf, and I have to say I was impressed with the game. Any shots I pushed on screen felt like push swings, and if I over-compensated by turning my hands over (with the controller) the over-compensating resulted in a hook, as it would in a real game. The only downside – and I am biased –
In The SwingBy CliveWhy Bad Shots Go RightOne of the most common complaints in golf is that, for right-handers, too many shots go to the right. And the most common denominator for a shot leaking to the right is hitting up at the ball.The act of hitting up at a golf ball requires an action that causes the clubhead to deviate from its natural swing path. A proper swing path will see the leading
Mortgages made simplewith BrentMortgage Brokers Undercut Banks!Financial Post – 2012Mortgage brokers are once again undercutting the banks and some are willing to buy down your rate — eating part of their commission in the process — to gain customers.Steep mortgage discounts from the major banks have all but disappeared from the market, leading mortgage brokers to make sacrifices for market share
In The Swingby CliveFace AngleWhat I am about to say may come as a bit of a shock. More so, though, I hope it comes as a pleasant surprise; perhaps even a relief. Too much emphasis is put on keeping the face to the club square at impact. Far too much.The fact is, you can hit a perfectly straight shot with a slightly closed clubface. You can also hit a banana slice with a square one. There are so
In The SwingBy Clive SpeedI become increasingly incensed every time I see a golf product or book claiming a solution for one’s ailing golf swing, with no practice required. Now, there are lots of people out there claiming to have the secret ingredient to the golf swing, and many no doubt have valuable information to contribute. However, if mixed in with their claim is the statement or even
In The SwingBy CliveRelaxToday I want to write about the need to relax when swinging, and what that really means. But first I will digress to a not completely unrelated topic. A short while ago I was watching the annual skills competition for the national hockey league, the main league for professional ice hockey in north America. Their skills competition is a prelude to their annual all-star
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