Tag: in-house bookkeeper

Choosing The Right Accounting Software

Get the Accounting Software Your Small Business Needs to Succeed

If you are looking for an accounting system for a small business you may want to start by reviewing the features included in prepackaged solutions such as QuickBooks or Xero. These are relatively inexpensive and can be set up and functioning quickly with some user training.

Businesswoman working on laptop.Depending upon the version purchased, these packages will offer the user the ability to perform basic bookkeeping functions such as

  • Creating estimates and invoices
  • Syncing bank or credit card accounts
  • Printing checks
  • Reconciling bank accounts
  • Exporting data to Excel
  • Maintaining a General Ledger
  • Providing basic financial reports such as Balance Sheet and Profit & Loss statements.

If not offered in the basic versions, more advanced features may include preparation and printing of 1099’s, payroll, inventory tracking, time & billing, budgets, and enhanced financial reporting. In addition to the pre-packaged accounting software, there are many add-on applications that can automate many business processes.  For example, applications are available to provide point of sale solutions, enhanced inventory management, paperless bill-pay processes, employee expense/reimbursement processing and sales tax automation. There are even CRM and document management add-on applications available to help manage and grow your business.

Do your homework before buying accounting software

Not every app will integrate with every software package or version so it is important to do your homework. And if remote access is important to you, many packages offer both cloud-based and desktop versions of their software. Be sure to compare the features offered in each since certain functionality may be available in one and not the other.

It is also important that the system you use for your business provide an audit trail and the ability to lock down closed accounting periods. These functions will protect the integrity of the data and limit unauthorized posting or deletion of data.

Accounting software for a growing business

So what do you do when you believe you have outgrown the small business packaged software solutions such as QuickBooks or Xero?

First, be certain that it is the accounting software that you have outgrown and not your operational software. For example, a large volume distributor may have intricate inventory management, markup and costing operational needs that are best managed through industry-specific operational software. If this is your dilemma, then it is not only necessary to evaluate the accounting functions of the software; most often, the operational functionality will take the lead in the selection process.

Although they are getting better, we often see excellent industry-specific operational systems that lack functionality and integrity on the accounting and financial reporting side. In these circumstances, it is important to determine if the benefits of operational reporting outweigh the accounting functionality. If so, some customized software enhancements may be needed at additional cost. These operational and accounting software packages will be much more costly than packaged software and require significant training for all users. Most often it is recommended to run a new system simultaneously with the prior system until the integrity of the data can be tested and trusted.

In either scenario your accountant should be able to help you in the software selection process. He or she should understand your business operations, user needs and reporting requirements and be able to offer valuable insight in your selection process. Your accounting software should allow you to process transactions efficiently and provide financial reporting that will help your business be more profitable.

If you have questions about choosing the right accounting software for your small business, KRS CPAs can help. Give me a call at 201.655.7411 or email me at [email protected]

Good Business Performance Starts with Good Record Keeping

Good financial record keeping is vital to the success of any business. Good records help plan for the future, prepare accurate financial statements and tax returns, and enable business owners to create sensible budgets and cash flow projections.Taxes_iStock_000001334173_Medium

Small-business owners have a multitude of issues to contend with, whether they are in startup mode or more seasoned. One area that often requires a bit more of their attention is keeping good financial and other records for their company.

How keeping good records makes for good business

Your bookkeeping records help you make smarter and well-informed business decisions, for one thing. You don’t know where you’re going if you don’t know where you’ve been. Solid financial record keeping for your business helps you plan for the future based on real data. Your company’s financial records:

  • Provide the basis and support for your tax return preparation (track income, expenses, deductions, etc.).
  • Help you prepare financial statements (income statement, balance sheets, cash flow) and other financial reports that help you monitor your company’s progress. Are you doing better or worse than anticipated or compared to prior years or budgets?
  • Track inventory and maintain better inventory controls and spending.
  • Identify income sources and pricing levels.
  • Collect revenues and know which customers owe you money.
  • Track your basis in property – needed to figure gain or loss on the sale, exchange or other disposition of property; depreciation, amortization, depletion, and casualty losses.
  • Are the foundation for formulating accurate, sensible budgets and cash flow projections.

So beyond the “why keep financial records?” are several other questions we often hear from our clients who are business owners.

Which records should I keep?

Although there is no law stipulating what you must keep, for a small business we recommend your bookkeeping records include reconciled bank statements, cash receipts by customer, payroll reports, vendor invoices, accounts payable and accounts receivable aging, and anything specifically related to your field or industry that you’ll need for your tax returns. We recommend tracking all your business-related income and expenses in an accounting software program.

Depending on your occupation, you might have expenses related to: travel, meals, entertainment, wholesale goods or supplies, and equipment purchases or leases. In addition to your financial data, The Association of Records Managers and Administrators (ARMA International) offers these basic guidelines:

  1. Business documents – Establish your right to conduct business, such as articles of incorporation, by-laws, and business and tax-collection permits.
  2. Business agreements – Demonstrate your company’s obligations to your customers/clients, suppliers, vendors (such as contracts), and your staff (such as employee benefit packages and individual selections).
  3. Executive decisions – Show how business decisions were made and commitments honored, including annual reports, dividend records, board of directors meeting minutes and actions, and company health and safety documents.
  4. Regulatory compliance – Proof you have met legal and regulatory requirements of your industry.

How long do I keep financial records?

There is no set answer but general guidelines that relate to income tax returns are outlined by the IRS. Time frames range from three to seven years, depending on certain criteria (the IRS recommends “indefinitely” for certain other scenarios). Hold on to all filed tax returns and basis records because they will help with preparation of future returns and provide excellent financial history. Employment tax records should be retained for at least four years.

A good rule of thumb is to keep documents as long as you need to prove the income or expense/deduction on a tax return. Your accountant should be able to recommend the best course of action for you.

What is the burden of proof?

Burden of proof refers to your responsibility to substantiate entries, deductions, and statements made on your tax returns. If you plan to deduct certain expenses, you must be able to prove certain elements of them.

The IRS offers more in-depth information and guidance about the how, what, and when of maintaining financial records at https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Recordkeeping.

Can’t keep it all straight? No worries.

Maintaining your company’s books and other records may feel daunting to owners of small businesses without a controller, staff accountants or a good bookkeeper. Our Business Office Group’s EZ-Bookkeeper Solutions fill that void and relieve that pressure by handling all your full-charge bookkeeping and back-office administrative needs. This staff has been trained by our own CPAs and ensure your financial records will be well organized and in order, and that statements and reports will be properly prepared and filed on time.

Give us a call to find out more at (201) 655-7411 or go to www.krscpas.com/services/business-services-bookkeeping/ for details.

Are You Starting a Business? This Handy Checklist Will Help You Get off to the Right Start.

free business startup checklist
Get a free checklist that will walk you through the key steps to starting a business.

Starting your own business is an exciting endeavor but one filled with so many questions. Selecting a name and a location, picking out office furniture, and figuring out what equipment you’ll need are just the tip of the business iceberg.

Getting started on the right track with all the necessary financial details can have even the savviest of new business owners quickly drowning in paperwork and decisions.

Some issues you need to grapple with as you begin your business venture include:

  • Should your company be registered as a partnership, and S-Corp or an LLC? Are you going into business as a sole proprietor?
  • How will you track your daily expenses and financial transactions? Then there’s also:
    • Who will do this in your new company? With so much happening with a startup, are you better served outsourcing your bookkeeping to an experienced accounting firm?
    • Which expenses are mandatory to track in order to develop accurate financial forecasts, budgets, and cash flow reports?
  • Should your company’s accounting be on a cash or accrual basis?
  • What are your new venture’s tax responsibilities?

There is lots of information for business owners available from the IRS and the Small Business Administration. But for easily accessible info that takes you through all the critical accounting pieces of starting up a company, you can download our free business startup checklist at http://krscpas.com/go/business-startup-checklist/. With years of experience working with business owners in New Jersey and New York, we can help get you on the right track—and stay there!

Once you’ve downloaded the checklist and had a chance to look it over, give us a call to discuss your startup’s needs at 201.655.7411 or email [email protected] for a no-obligation initial consultation.

 

 

Does Your Small Business Need Help with Bookkeeping Tasks?

Outsourced bookkeeping
Outsourcing your bookkeeping and back office tasks can free you up to focus on your business

Small-business owners bring expertise and commitment to their companies, but many find they are often too busy running their operations and taking care of their customers to deal with paperwork. We all know how quickly those stacks can pile up, and unfortunately, it’s all too easy to lose track of bills that must be paid. And what about reconciling the corporate checkbook on a timely basis?

Continue reading “Does Your Small Business Need Help with Bookkeeping Tasks?”