There is no doubt that your accountant has a thorough understanding of who you pay, who pays you and how to keep your book of accounts maintained. Just because your hired accountant is so deeply involved in assisting with your financial decision-making needs, your company relationship with him should be the one that is built on a foundation of trust and transparency. However, sometimes building that kind of loyal relationship is not so easy as it seems and when that trust no longer exists, it may be the right time to switch.
Reasons to consider switching to a new accounting firm
Behind every serious action, there are several reasons which compel one to move to another accounting firm. Below, we have mentioned those key reasons when business owners start seeking for dedicated accounting help elsewhere.
If an accountant is not industry-specific, they may lack the basic knowledge of your business. When the business owner gets the feeling that the accountant isn’t “getting it” in regards to their specific business needs they may consider switching to a firm that specializes in their industry.
Some business owner becomes frustrated when they can’t reach their accountant on-time either via phone or email. This is one crucial reason which compels the owner to make an instant switch.
If a dedicated accountant of the firm passes away, retires or moved out of the organization, business owners can utilize this opportunity for a fresh start.
Sometimes business owners paying too much for accessing accounting services that may not even do justice to their expectations. This is usually the case when you have either hired an in-house accountant or a firm that charges higher and has trapped you into a contract.
If you have had any of the above concerns or facing them, it is time to think about finding a new accounting firm to meet your business needs.
Advantages of switching to experience and trustworthy accounting firm
If you have been thinking about leaving your current accounting firm, with a better understanding of the reasons and advantages of hiring a new one you can hire the best one in the industry. Switching to a new accounting firm or professional is an investment that always moves in business favor.
Payroll is always on priority for any business despite their industry type. It’s also a major responsibility of business owners looking for ways to increase the efficiency within their organizations. After all, employees expect a prompt and accurate payroll, every time. Simultaneously, business owners want payroll to be easy and hassle-free, so they can concentrate more on improving their business productivity while keeping their employees satisfied and motivated.
Many of the organization feels that if they pay their employees on time, then they have an efficient payroll process in place. But there’s a lot of behind the scenes hard work involved to make the complete payroll process seamless from start to finish. In fact, it is one of the most complicated tasks for any organization. Complication to tax regulation, compliance, and employee benefits- all of them together can ruin the accuracy and timing of your payroll process.
As per the payroll operations survey report conducted in 2014 by Deloitte Consulting, it was observed that most of the complicated challenges that companies face in payroll processing include:
In the long run, these factors could drastically affect the productivity of your organization as well. Therefore, to make sure you keep your employees happy while complying with employment regulations and compliance, here are five secret steps you need to follow to improve your organization’s payroll efficiency.
Even a minor mistake in the computation of employee payroll could result in hefty penalties. Failure to comply with IRS payroll regulations is usually high and companies are required to fix those errors while paying the due amount to the IRS if any along with the penalties. However, if you want to avoid such critical errors, you need to acquire a thorough understanding of tax laws from an experienced accountant. This would help you avoid any mistakes.
If your employees have a complaint that their payroll is delayed or inaccurate, then you need to conduct regular, ongoing audits. Begin the process with a workflow analysis from start to end. Analysis should include: checking every step in the payroll process for accuracy, implementing an automated attendance and conducting training programs.
Since payroll is a comprehensive and recurring process, businesses must develop a defined calendar of deadlines and stick to it. Frequently fluctuating deadlines force payroll specialists to deal with the stress, which in turn can automatically result in errors. To avoid this mess, create a calendar that covers every step of the payroll process.
Mistakes will definitely occur if an employee misunderstands your company’s payroll policy. Therefore, make your policy simple, easy to understand and most importantly transparent to your employee’s access. It is vital to provide clear and brief policies for attendance, paid leave, and expense reimbursement to employees. Transparency in payroll policies will help to avoid any sort of misunderstanding.
To maintain the transparency and balance in your organization, consider providing online access to your employee’s current and past payroll information. Doing this will significantly reduce the inquiries of staff.
Running a successful payroll process can welcome fruitful advantages to business- not only just reduce costs, but in the form of better global payroll services, improved employee productivity and the companies too. Outsourcing such complicated service in the hand of a payroll specialist who has in-depth knowledge of bookkeeping, accounting and payroll process can prove valuable.
Being a responsible business owner, you’re always looking for productive ways to maximize your business efficiency as well as production. However, you can be a pro at driving sales, but certain aspects of running a business can require an exceptional level of professionalism, otherwise, it can divert your attention from focusing on your core business. One of the areas that require a pro knowledge and expertise of an experienced professional is your accounting department needs.
This is one area that a business owner can’t ignore even if he wants to. If you plan to do it on your own, you could end up in tax complications with the IRS codes. Also, you won’t be able to prepare the financial statement of your business, so you are always on the lookout for new and innovative ways to streamline your business efforts.
But what if you don’t have the excellence and knowledge to prepare your books of accounts with accuracy? Or what if you don’t have the manpower to maintain your finances? Well, this is where professional accounting BPO services in California come into the scenario. In this post, we will try to break down two important topics which state the dire need for outsourcing accounting needs.
Let’s start with the first question…
Why Hire Accounting BPO Services?
Maybe because you’re overburdened with other paperwork, driving sales or maximizing business production or anything in between. Or maybe, you have tried it, but the service provider or software you have used didn’t give you the accurate result.
Maybe you don’t have the time or money to hire someone professional accounting expert, but definitely want accounting and financial expertise. Maybe you want better data and accurate reflection of your business financial health condition to get the trust of your shareholders back.
The reasons are many which may vary as per your desires, but the benefits you can reap from outsourcing are fruitful and can strengthen your financial position in the industry.
Benefits of accounting outsourcing services
Outsourcing your accounting needs is generally less costly than, of course, hiring someone professional in-house. When you outsource accounting services, you’re no longer paying employees for 8-9 hour of work per day to manage your finances. Also, it saves you time and money required to recruit and trained, hired professionals, simultaneously relieves you from paying salaries, payroll taxes, insurance, etc.
Hiring an in-house accountant won’t necessarily drive revenue. However, outsourcing your accounting allows you to save your hard-earned money and invest it toward some productive activities, for instance, website, ad campaign, improving product quality, hiring sales personnel, etc.
Trustworthy accounting and financial data is the backbone of your business decisions. When you outsource your accounting data needs, you will get the reports that give a clear reflection of your business financial status that will empower you to make growth-driven decisions with confidence.
Outsourcing your accounting may seem intimidating, but with an accounting firm equipped with the right skill set and expertise, you can pay more attention to your business’s growth and development. You can also have a peace of mind knowing that your business accounting department is backed by a professional accounting firm.
Many small businesses don’t realize the fact that 87% percent of Los Angeles business fail within 1.5 years. One of the main causes of such fact is the poor preparation of taxes. In an attempt to save money and protect the business from winding-up, you might think that it’s a good idea to prepare your own business taxes. But when you actually start preparing for taxes, you didn’t anticipate for the IRS jargon, complicated tax rules, and their recent updates could take you for a loop.
If you find yourself getting overwhelmed by preparing and filing your own tax returns, your business needs a professional tax pro help. Through this post, you will get to know all the possible reasons why your business direly needs tax expert assistance.
Taxes are dreadfully complicated as well as confusing. There are like tons of laws, rules, and constant updation and a barrage of numbers which needs complete excellence. It’s easy to make an error- especially if you’re not trained to handle the complicacy of tax preparation. If you have a mindset that a single tax error is not a big deal and it doesn’t affect other numbers, think again?
Even one digit error could easily hamper an IRS audit and end you pay thousands in penalties and interest. To address these minor and complicated tax issues, a tax professional specializing in tax preparation services will help you avoid errors as he is already trained in tax laws, policies, provisions, and tax preparation methods. So his expertise and knowledge will be an asset for your business.
Growing a business and its productivity takes time. In the initial stage, you’re likely the salesman, marketer, delivery man, and everything in between and beyond. You might have also played the role of the accountant.
However, you can perform any duties, obviously not with perfection, but tax filing is out of the zone. It only takes the excellence of tax pro, so leave this task to expert hand and by doing so, you will get more productive time to focus more on growing your business.
There are thousands of deductions, credits, and loopholes, a taxpayer is eligible to claim for. You have to identify which deductions, credits and loopholes your tax situation applies to you. You likely don’t have the time to read the complete book of the Internal Revenue Code to figure it out. You also don’t need to read the book when a tax expert can help you make the most of your deductions and savings by using their years of expertise.
The life of a businessman is isolating, especially when you’re left with dozen of receipts and invoices to compile through at the end of the accounting year. As the saying goes, “expert hands make the burden light” and partnering with the Los Angeles tax expert who has the skill and abreast knowledge is the safe way to go and most importantly you will have peace of mind.
“You can’t find a room for improvement until you don’t measure!” This is why every business needs to be well informed of the status of their financial statements. One of the vital competency they need to form is to clearly understand the financial statement which reveals the financial health status of businesses. Understanding the core of financial statements such as Trial Balance, Balance Sheet, and Profit & Loss statement is essential for making sound decisions regarding further expansion and financing.
Running a business without understanding the financial statement is like driving a car without the steering. To help you understand the significance of financial statement reporting we’ve produced this guide that answers the following questions:
Let’s begin the guide by understanding the financial statement reporting.
Q1. What is financial statement reporting?
Financial statement reporting refers to the standard practices which give stakeholders a transparent report of a company’s finances, including revenue, expenses, cash flow, profit, and capital, as formal records that provide in-depth insights into financial information. Each of the mentioned statements reporting is mandatory because they are the only source that provides in-depth insights into financial information to the shareholders and investors.
Now that we have explored the businesses financial statement reporting definition, let’s glance at the benefit of these reports.
Benefits of Financial Accounts Reporting
We all know that debt not only affects the reputation of a company, but also disabled the progress of a company, regardless of business or industry type. Maintaining up-to-date financial records of business will help you track your current assets divided by the current liabilities on your balance to help measure your liquidity and manage your debts accordingly.
By gaining the detail-insight of your company’s financial information, you will be able to make accurate, informed decisions swiftly, thereby avoiding financial issues while maintaining your financial status at all times.
Statement prepared by professional accountants gives you a great decision-making idea. Their accurately prepared financial accounting reports indicate business trends and future scope for investment, showing how the firm is receiving money and at what rates creditors are being paid.
Business liability is a crucial part of the company’s financial health status. Business loans, credit cards, and debt extended from vendors are all vital liabilities that need to manage from time to time. If you are planning to apply for a business expansion loan, you can explore your business financial statement report and determine if you need to reduce existing liabilities before applying for the loan.
This is how staying updated with your company’s finances can draw a thin line of difference between business success and failure graph report.
So, you want to save on taxes in 2019. Who doesn’t want it? It’s a matter of fact that higher-earning comes with higher tax liabilities. Taxes are by far the highest expense incurred by most people and the major reasons why every taxpayer wants to save a big on them. However, paying hefty taxes is unavoidable, but California’s tax expert find ample opportunities to help achieve a lower tax bill. According to the tax expert viewpoint, just like we plan everything for retirement, we should plan for paying taxes. But, the concern point is that most people know how to plan for retirement, but they’re unaware of tax planning as it is more subjected to taxation expertise and knowledge.
Simply put, tax planning is an analysis of the financial situation from a tax perspective to reducing tax liability. However, developing an effective tax plan is no way an easy task mostly because tax laws tend to be complex. But if you consider utilizing the expertise of Los Angeles tax professional to your advantage, you can greatly save on taxes.
Want to know more about efficient tax planning and using it to save on the higher tax amount? Here are some tax-saving secret for start-ups and business owners that will help reduce their tax liabilities and save more of the business revenue for them.
One of the most effective ways to reduce taxes for your business is by employing a family member or spouse to your business. With this little known secret of a tax specialist, business owners can pay a lower marginal rate or eliminate the tax on the income paid to their hired family member. Since you have to pay certain income to hired closed ones and this will be an expense to the company, so you become eligible to set this off from your business taxable income, This way you can reduce the total tax liabilities of the company.
Generally, the stock is valued at cost, but stock with shorter shelf life should be valued on the cost or NRV (Net Realizable Value), whichever is lower. NRV generates the actual realizable value of stock and, thereby, prevents overvaluation of stock, which ultimately reduces taxes further.
Tax credits are the government approach of encouraging businesses and individuals to do experiments or innovative things which work positively both for the company and environment. For example, you can ask credits for doing research, going green activity, hiring more employees, health coverage for employees and providing access to disabled employees.
Depreciation is one of the best ways for you to save a big amount on tax. All capital expenses incurred for business purposes should be made in the name of your company. For example, if you purchase a vehicle, desktop, furniture for business use, then bill it under the company’s name. You, as a company, can claim depreciation for these business expenses, at a different rate as prescribed under the IT act.
It is rightly said that a single penny saved is a single penny earned! Also, it’s understandable that you’re not a pro in saving taxes, however, being a responsible business owner, you can consider hiring a tax professional in California to record every small transaction in business in an appropriate manner and can help you realize the full potential of what you could be saving. Also, in most instances, the cost to hire a California’s tax professional will pay for itself with the amount of tax savings you can expect.
Calling yourself as a self-employed is a desire of many people. Being self-employed comes with several benefits to enjoy, like:
These three benefits, raise hope for many to do something of their own. But before you move forward to become self-employed, make sure you know what it impacts it can bring to your tax liabilities. Self-employed tax? Yes, aside from the income tax, you may be required to pay self-employment taxes in Los Angeles that support the Medicare and social security programs. In fact, as a self-employed professional, you’re likely to bear more tax liabilities when it comes to payroll taxes.
So, it becomes vital for you to find some effective solutions against increased self-employed tax burden. Luckily, the hiring of tax preparation expertise will give you a sigh of relief as they guide you thoroughly the effective ways to legally reduce your tax liability as a self-employed professional- and to save more of your hard-earned income.
Before jumping into the measure to take, let’s first understand what exactly, self-employment taxes are.
What are Self-Employment Taxes- And Who Pay Them? In simple terms. Self-employment tax is a tax paid by the individuals who are their own bosses- either through owning businesses or being working as a freelancer or contractors. These individuals account for social security and medicare and are required to file SE (Self-employment) taxes for themselves.
How to Lower Self-Employment Taxes?
Ok, now that you know what self-employment taxes are and who pays them, let’s jump into the strategies of tax professionals that you can use to lower your self-employment taxes.
What exact you pay into Medicare and Social Security is known as SE tax. Being standing into the position of SE, you are authorized to claim for an eligible deduction on your SE taxes, after seeking the consultation of tax professionals in California.
In this circumstance, you can deduct up to 50% of your SE taxes from your taxable income. Technically, it will not actually lower your SE taxes that you owe, but reduce the total amount you’ll pay to the IRS.
It might sound counter-intuitive, but spending more on your business can actually help you save more by lowering your liability to SE taxes.
The SE tax of a business owner heavily based on his/her net income. And because business expenses, reduce your net income, so it will automatically reduce the amount you’ll owe in SE taxes. Therefore, don’t forget to include your eligible business expenses incurred on like purchasing of office equipment, advertisement, and labor costs to lower your SE tax burden.
You might get surprised to know that the way you organize your business can make a big difference in your tax liabilities. By organizing as an ‘S’ corporation instead of an LLC or sole proprietorship. With an ‘S’ corporation, you become eligible to pay yourself a salary and eventually leverage the opportunity to lower your SE taxes on a portion of it.
Claiming for deductions is another legal way suggested by a tax expert to lower your taxable income- which in turn, will reduce your tax burden for self-employment. There are a number of deductions you can claim as a self-employed individual:
The point is, there are many more deductions available for self-employed- and if you want to lower your SE taxes, you should seek the reliable services of an experienced tax professional in California and Los Angeles, as they only have the bundle of knowledge of how to reduce the one’s self-employment tax liabilities.
No matter what is the type or size of your business, but when it starts growing bookkeeping becomes a chore that you want to outsource. Bookkeeping services of professional help you manage day-to-day transactions in business accounting software, generating financial statements and reconcile bank statements. It’s always great to have a reliable bookkeeping service in Los Angeles, as it includes a variety of accounting tasks- all of which are important for your finances and overall business operations.
No matter what is the type or size of your business, but when it starts growing bookkeeping becomes a chore that you want to outsource. Bookkeeping services of professional help you manage day-to-day transactions in business accounting software, generating financial statements and reconcile bank statements. It’s always great to have a reliable bookkeeping service in Los Angeles, as it includes a variety of accounting tasks- all of which are important for your finances and overall business operations.
With the essential requirement of bookkeeping in California, these are some of the questions you may ask yourself or going in your mind. To sort your queries, this guide will help you break down everything you need to know about finding bookkeeping services for your business.
Places To Look For Finding the Reliable Bookkeeping Services
There are plenty of places where you can begin the process to find the best accounting or bookkeeping service. From simply browsing online to asking for recommendations from your network.
• Online Searching
One of the trendiest ways you can adopt for bookkeeping services is by searching online. Doing this, you can get a list of various names which you can look after and can make your informed choice. Keep in mind before choosing the service go through the reviews and know about their experience and the specific solutions they offer.
• Accounting software provider partner directories
You can also consider the bookkeeping services through your accounting software provider’s partner directories. It is found that most of the accounting solutions provide certification programs for bookkeepers and accountants. Moreover, partner directories aren’t just limited to core accounting services, but cover every basic accounting requirements.
With their certifications, you’ll be ensured that they have the potential to use your particular software to its fullest capacity- and thereby providing more efficiency to your business.
• Consult with industry
For a wise decision, you can take the consultation with industry associations to come to an outcome. Some of the organizations maintain a list of bookkeepers and accountants who are well-versed in their field. Check with your industry association to see if such a list exists or not.
• Go through the blogs and websites
Many bookkeepers like to share their accounting skills by writing for financial blogs and websites. You can read their blogs and if you find something valuable, then check if the author is a professional bookkeeper to whom you can reach.
You now have a better picture of debt, what it is and the level of risk involved. Let’s take a look at the equity investments.
Finding a knowledgeable bookkeeper and working with the best one is essential for a business’s success. Whether you’re starting up your business or fine-tuning your financial strategies, a professional accountant or bookkeeper can be a reliable help when it comes to balancing your regular earnings, expenses and managing your invoices. Get ready to leverage the skills of the right bookkeeper by taking quality time out to find and hire the right bookkeeping services.
The argument for debt Vs equity investments continuing for years in the investment sector and will be ongoing for years to come. They seem to be the different sides of the same coin. There are plenty of ways for an investor to get the funding in the company and debt and equity investment are one of them.
Both the investment options offer valuable returns to the investors and have their own set of notable features. Understanding the detail of debt and equity can be overwhelming, especially for a beginner. However, making the decision to start investing after seeking a consultation with an experienced accountant in Los Angeles is the right step in order to become a successful investor.
Debt and equity both stand at the same level, however, they vary in terms of risk. Both are the external sources of finance for a business. Whenever a business needs finance for an expansion of projects or reinvestment, they go for equity or debt. ‘Debt’ involves borrowing money, which will be repaid with interest, while ‘equity’ involves raising money by selling interests in the company.
This post will explain both debt and equity investment, and when each is most appropriate.
Debt
Debt investments generally consist of a lesser risk while investing in a company. But with less risk comes less return. A debt investment means the investor loaning the company money with a loan agreement. This agreement contains certain condition which says:
You now have a better picture of debt, what it is and the level of risk involved. Let’s take a look at the equity investments.
Equity
As opposed to the debt, equity is generally considered riskier than debt investments. And of course, with higher risk comes an opportunity for a higher return. More and more investors will tend to purchase shares in the company at an agreed valuation in the hope that the business will grow in value and they will get a higher return on their investment when they sell their purchased shares. As a shareholder of the company, the investor also gets the right to vote at shareholder meetings and hold a share in the company’s dividends.
Which one is the better choice?
We have gone through all the major differences between debt and equity investments, and understand that both are important for business growth. Both offer advantages and disadvantages. It is just a balance between risk and return. The choice completely depends up on your preference, whether you prefer equity’s higher return opportunities with higher risk or debt’s less return with lesser risk. Therefore, the choice of which investment option is better really comes down to the individual investor.
However, deciding whether to finance your business through a loan or by giving shareholders a stake in your company is a serious matter. You have to make an informed decision between the investment choices before finalizing the decision. To better guide you with your confusion seeking the consultation with a skilled accounting professional in Los Angeles and California now can save you much and make you feel never regret your investment decision.
It’s high time to start understanding financial statements. Why? Because it is the only ideal way through which business owners get transparent insight into how their company is performing and what is the scope for future investments. However, if you stay unfamiliar with them, financial statements in California can seem like a mysterious sketch that can cost you to fortune, so better left the job to professional accountants and other accounting specialists.
Every business owner must know how to read the financial statement. Otherwise, the owner would never be able to know the present financial position of the business. You can take a sigh of relief knowing that you don’t need a bookworm knowledge to understand the Los Angeles financial statements. When you know how to read them, you can track your performance, plan for a month-to-month cash flow and file taxes without taking the stress.
Here’s an easy to understand guide to using financial statements for your small business.
What are the financial statements?
In simple terms, a financial statement is a written record of a company’s financial position. It includes standard reports like:
This statement covers the company’s inflow and outflow of cash
This statement reveals the company’s profit and loss for the year after eliminating all the expenses.
The report reveals the actual financial position of the company and what funds the company have-on hand to continue with.
Financial statements sum-up your accounting reports in such a way that become relatively easy to understand. They’re recorded regularly depending on your business transactions. This statement stands as one of the essential components of business information, and as the principal method of directing financial information about an entity to owners, shareholders, and investors. Generally, financial statements in Los Angeles are created to meet the diverse needs of many users, especially owners and potential creditors.
Methods To Create Financial Statements
Financial Statements can be generated accurately in three different ways:
There are many online accounting software available which will generate automatically generate accurate financial statements for you. However, keep one important thing in the notice that your business statements will only be dependable if your entry of the transaction in the Journal book is accurate and up-to-date.
Many bookkeepers, including online bookkeeping services, will maintain the financial records of an organization by recording transactions daily. He or she does this by undertaking the following tasks:
An accountant is the one expert who incorporates numerous duties and responsibilities while generating an error-less financial statement for the business. Accountant share key contributions such as robust financial skills, attention to detail and a clear understanding of accounting ethics. An experienced accountant can be anything from a bookkeeper to a strategic adviser, generating accurate financial information for business owners to present them the real scenario of their business financial status.
Financial statements give you all the essential information you need to make future decisions as well as to file taxes. Most importantly, the statement provides the powerful information to investors. And reliable information is the investor’s best tool when it comes to investing wisely as well as informatively.
