Traditionally, keeping an account of outgoings and in-comings of one's private or even business undertaking is considered a difficult task; it can be really difficult to maintain a reasonable level of discipline. Many people will rather use their intuition to manage their affairs as only they can. Unfortunately, the majority of such people either fall into debt or end up in some other form of financial mess. I say some because a few people make it unscathed, sheer luck!
Accounting is not an easy task. It is even worse when an entrepreneur has to learn debits and credits. Small businesses are usually limited in their funding to employ full-time accountants armed with expensive accounting packages.
Splashing out money on pricey accounting packages may be a waste of money and time as the scarce resources can be put to better use in the business. However, avoiding accounting tasks is usually a costly mistake as tax penalties and poor decisions usually follow. Using simple accounting solutions available online might be the answer.
Simple accounting solutions available online started as an attempt to get rid of all the jargon and complexity and also the cost that comes with current accounting packages by simplifying how daily bookkeeping and accounting is done and how it is delivered to the people that need them most at a low cost.
Some really easy to use online solutions that make simple accounting possible exist today. The task of recording sales, purchases and the cash of a business is a straightforward process. Putting it together in accounting language, and generating trial balances and financial statements is time-consuming and can be difficult to do. A simple accounting solution removes the difficulty. For example, it creates the space to create sales invoices and requests for payment and records the accounting side and reports.
Such online solutions are also easy to access for the first time and they get easier and easier to use as the business person continues to operate them.
Simple accounting solutions also simplify the preparing accounts for tax filing and other forms of compliance with the help part-time accountant, but the most important advantage is how the business owner's ability to make informed decisions about the business is improved. This may not be considered a big deal, but in reality, the business owner does not have the time to create reports in the office or the money to waste on fancy systems. With simple accounting solutions online, all a business owner needs to maintain up-to-date records and view reports is a smart phone or mobile devise with connection internet. To put it another way, a business owner's accounting solution can fit into a pocket and will go everywhere, and will be available at any time. This is simplicity and efficiency all rolled into one.
Some of such online solutions available today come with a lot of free value adding services like customised email for sending invoices and reminders for payment that help improve cash flow and business efficiency in general. In fact, some of the solutions provide key date notifications that enable business owner stay up-to-date with important things such as tax filing date and accounts completion dates.
What Are the Break-Even Analysis Best Practices?
One of the ultimate goals of a business is to gain profit. This is why company owners often measure their profitability above others. There are many ways that will allow us to determine whether we are receiving proficient cash flow to the organization and one of them is the break even analysis. When a company "breaks even," this means that a particular product or service has stopped costing them money and begins to provide profit for the firm. In other words, break even point denotes that sales have attained a level in which it can cover the fixed and variable costs of the production and the distribution of that certain unit of product or service.
With the help of break even analysis, managers can obtain valuable information so that their company can become even more profitable. The data that have been gathered can be used to set price levels as well as in targeting the best price combinations for both variable and fixed costs and determining whether the business strategies can attract financial possibilities. With all these helpful pieces of information, it is indeed necessary to perform a break even analysis for your business.
To ensure that this type of evaluation will be a success, you should know the break-even analysis best practices. First is that there are only three ways for you to lower your break even point. These are to lower the direct costs so that you can increase the total margin, decrease the fixed expenditures, which will help lower the needed total costs or you can raise the prices so as to increase the profits of your company.
It is also one of the break-even analysis best practices to categorize the costs into two kinds: fixed and variable. This is essential in the whole process of evaluating the break even point of your business. Fixed costs refer to those prices that are not linked to the amount of production and they remain motionless even if you have not produced goods. These involve the salaries of the employees, the property taxes, insurance and interest. Meanwhile, the variable costs are those that rely on the output of the production or the sales. These often include commission, packaging, raw materials and shipping prices.
Do not forget that the break even point is not a stagnant figure. As one of the break-even analysis best practices, it is important that you are able to compare the projections to results that happen in real life specifically every three to six months. If necessary, you should make adjustments over time. You can use a break even chart which will tell you about the sales revenue, the fixed costs and the total costs. This way, it will be easier for you to calculate break even.
Your expenses for your business may tend to increase along the way and it is possible that you will fall below your company's break even point. Including a margin for profit is one of the break-even analysis best practices. This will help you target a particular profit margin objective and can easily be incorporated into the break even analysis.
With the help of break even analysis, managers can obtain valuable information so that their company can become even more profitable. The data that have been gathered can be used to set price levels as well as in targeting the best price combinations for both variable and fixed costs and determining whether the business strategies can attract financial possibilities. With all these helpful pieces of information, it is indeed necessary to perform a break even analysis for your business.
To ensure that this type of evaluation will be a success, you should know the break-even analysis best practices. First is that there are only three ways for you to lower your break even point. These are to lower the direct costs so that you can increase the total margin, decrease the fixed expenditures, which will help lower the needed total costs or you can raise the prices so as to increase the profits of your company.
It is also one of the break-even analysis best practices to categorize the costs into two kinds: fixed and variable. This is essential in the whole process of evaluating the break even point of your business. Fixed costs refer to those prices that are not linked to the amount of production and they remain motionless even if you have not produced goods. These involve the salaries of the employees, the property taxes, insurance and interest. Meanwhile, the variable costs are those that rely on the output of the production or the sales. These often include commission, packaging, raw materials and shipping prices.
Do not forget that the break even point is not a stagnant figure. As one of the break-even analysis best practices, it is important that you are able to compare the projections to results that happen in real life specifically every three to six months. If necessary, you should make adjustments over time. You can use a break even chart which will tell you about the sales revenue, the fixed costs and the total costs. This way, it will be easier for you to calculate break even.
Your expenses for your business may tend to increase along the way and it is possible that you will fall below your company's break even point. Including a margin for profit is one of the break-even analysis best practices. This will help you target a particular profit margin objective and can easily be incorporated into the break even analysis.
Accounting Software Classifications For Small And Large Businesses
Using an accounting solution is necessary to assist accountants and bookkeepers in monitoring all aspects of your business. We all know that a business requires very careful planning and management in order for it to grow and become successful. If there are mistakes and wrong decisions, your company could be in jeopardy.
Though it may seem very simple, choosing an appropriate solution for your business is complicated. You need to determine the specific needs of your business to know which type of software is the right one that could cater to these needs. There are different types and classifications of accounting software, and you have to make sure that you are getting nothing less than the best.
Modules and Classifications
There are different modules that comprises an accounting system. These include some core modules like the accounts receivable, general ledger, billing, inventory, purchase order, sales order, payroll and cash books. There are also noncore modules like those that address issues such as debt collection, payment performance and expense reimbursements. And along with these modules, software packages are classified according to their function.
Personal
The first type of an accounting software is directed at personal accounting, which is used for simple accounting purposes such as managing budgets, expenses and income for personal purposes. This type of software also assists you with your reconciliation of bank accounts and expense sheets.
Inventory-Accounting Software
This software classification is generally used for sales and purchase options where goods are sold. It is also made for inventory management throughout the process from purchase order to customer sales.
Medium Scale Enterprise
Medium scale enterprise businesses use accounting software that allows for multiple currencies and different regulation options. These software packages enable companies to comply with international standards. This level of software utilise flexible databases like Oracle, Pervasive, and SQL.
ERP Software
ERP or Enterprise Resource Plan software is a type of software that is more advanced and generally addresses more than just accounting requirements. This type of software is also used by mid-level organizations. The biggest advantage of using ERP is that it can generally be customized to fit and meet the unique and special needs of a particular business. However these accounting software solutions are generally very expensive to implement and operate.
Custom Developed
Some accounting software packages are custom developed for specific organizations in order that every need and requirement is met. This sort of package is generally used by large organizations such as banks and big multinational corporations.
Though it may seem very simple, choosing an appropriate solution for your business is complicated. You need to determine the specific needs of your business to know which type of software is the right one that could cater to these needs. There are different types and classifications of accounting software, and you have to make sure that you are getting nothing less than the best.
Modules and Classifications
There are different modules that comprises an accounting system. These include some core modules like the accounts receivable, general ledger, billing, inventory, purchase order, sales order, payroll and cash books. There are also noncore modules like those that address issues such as debt collection, payment performance and expense reimbursements. And along with these modules, software packages are classified according to their function.
Personal
The first type of an accounting software is directed at personal accounting, which is used for simple accounting purposes such as managing budgets, expenses and income for personal purposes. This type of software also assists you with your reconciliation of bank accounts and expense sheets.
Inventory-Accounting Software
This software classification is generally used for sales and purchase options where goods are sold. It is also made for inventory management throughout the process from purchase order to customer sales.
Medium Scale Enterprise
Medium scale enterprise businesses use accounting software that allows for multiple currencies and different regulation options. These software packages enable companies to comply with international standards. This level of software utilise flexible databases like Oracle, Pervasive, and SQL.
ERP Software
ERP or Enterprise Resource Plan software is a type of software that is more advanced and generally addresses more than just accounting requirements. This type of software is also used by mid-level organizations. The biggest advantage of using ERP is that it can generally be customized to fit and meet the unique and special needs of a particular business. However these accounting software solutions are generally very expensive to implement and operate.
Custom Developed
Some accounting software packages are custom developed for specific organizations in order that every need and requirement is met. This sort of package is generally used by large organizations such as banks and big multinational corporations.
Tax Prep Is Dead!
For the past thirty or forty years, the tax preparation business has been one of steady growth, with low barriers to entry, with no educational or licensing requirements. And, in most locations, anyone with a business card and a computer could call themselves a tax preparer.
Because of these minimal requirement, consumers had no quality control over their tax preparation other than to judge it by the size and speed of the refund. This gave rise to fly-by-night tax preparation businesses, refund anticipation loans, and more. Every new franchise was going to be the one that turned out to be bigger than H&R Block.
You know what happened?
Taxpayers discovered that when a preparer made a mistake, the IRS didn't care whodunnit, the taxpayer had to bear the responsibility. Of course the taxpayer could try to sue the tax preparer, but fat chance of that succeeding if the fly-by-night operation had already folded up and moved their tent.
So, as these fly-by-night operators left taxpayers stuck with the bill, the IRS began to receive a lot of complaints. Especially from folks who had originally thought it really great to be getting that giant refund. At least until they discovered the refund they were expecting was the result of a fraudulent return by a preparer who was long gone from town, and they were stuck with penalties and interest and were facing the potential of being charged for submitting a fraudulent tax return.
Sounds like fun, huh?
Taxpayers also discovered that they could do their returns online, or with free software, get more of a refund, legally, and avoided a lot of the penalties that they got by using the unskilled fly-by-night preparation firms.
Pretty soon, even the half-way decent firms found they were losing clients as the convenience and cost savings afforded by the interweb kicked in.
And, even their old failsafe, the Refund Anticipation Loan (the RAL) got hit as the Office of the Comptroller of the Currency (the OCC) hit them by forcing lenders to abandon the RAL business. All of a sudden, a main revenue stream for all the big firms, like H&R Block, Jackson-Hewitt and Liberty Tax Service dried up... almost overnight they were out of the bank products business.
Oh, the best part is yet to come. The IRS has started formulating rules for licensing preparers. First barrier to entry in a profession that is being squeezed to death by technology, fraud and bad loans. What would you do if you were in the tax preparation business?
Well, first of all, you could look for a job.
But, if you're like most self-employed folks, it's pretty hard to go back to a job once you've tasted the freedom, and hopefully the income of self-employment.
Maybe there's another way.
Maybe you could look at the industry in a different light and start looking at tax services other than simple preparation. Services like cost segregation studies, tax problem resolution, or non-profit organization formation. Things that may not require licensing or credentialing, and that build on the knowledge you already have.
Because of these minimal requirement, consumers had no quality control over their tax preparation other than to judge it by the size and speed of the refund. This gave rise to fly-by-night tax preparation businesses, refund anticipation loans, and more. Every new franchise was going to be the one that turned out to be bigger than H&R Block.
You know what happened?
Taxpayers discovered that when a preparer made a mistake, the IRS didn't care whodunnit, the taxpayer had to bear the responsibility. Of course the taxpayer could try to sue the tax preparer, but fat chance of that succeeding if the fly-by-night operation had already folded up and moved their tent.
So, as these fly-by-night operators left taxpayers stuck with the bill, the IRS began to receive a lot of complaints. Especially from folks who had originally thought it really great to be getting that giant refund. At least until they discovered the refund they were expecting was the result of a fraudulent return by a preparer who was long gone from town, and they were stuck with penalties and interest and were facing the potential of being charged for submitting a fraudulent tax return.
Sounds like fun, huh?
Taxpayers also discovered that they could do their returns online, or with free software, get more of a refund, legally, and avoided a lot of the penalties that they got by using the unskilled fly-by-night preparation firms.
Pretty soon, even the half-way decent firms found they were losing clients as the convenience and cost savings afforded by the interweb kicked in.
And, even their old failsafe, the Refund Anticipation Loan (the RAL) got hit as the Office of the Comptroller of the Currency (the OCC) hit them by forcing lenders to abandon the RAL business. All of a sudden, a main revenue stream for all the big firms, like H&R Block, Jackson-Hewitt and Liberty Tax Service dried up... almost overnight they were out of the bank products business.
Oh, the best part is yet to come. The IRS has started formulating rules for licensing preparers. First barrier to entry in a profession that is being squeezed to death by technology, fraud and bad loans. What would you do if you were in the tax preparation business?
Well, first of all, you could look for a job.
But, if you're like most self-employed folks, it's pretty hard to go back to a job once you've tasted the freedom, and hopefully the income of self-employment.
Maybe there's another way.
Maybe you could look at the industry in a different light and start looking at tax services other than simple preparation. Services like cost segregation studies, tax problem resolution, or non-profit organization formation. Things that may not require licensing or credentialing, and that build on the knowledge you already have.
The Problem of Later Paying Customers
It is a sad fact of business in the UK today that many customers simply don't, or won't, pay on time. They ignore the payment terms that they agreed to when they placed the order. You feel uncomfortable chasing them for the money. So the money sits on your ledger looking older and older each month until its so old and you feel so uncomfortable chasing them, that you either write off the amount or decide to sue them for it.
The fact is that late paying customers are paying late because you let them. Many many businesses now have a payment procedure that starts with 'don't pass this invoice for payment until the supplier chases for it'. So f you are embarrassed to chase for it, you won't even make it onto their payments list at all. Ever.
If you don't ever ring them up to politely ask when you can expect to be paid, you'll never find out if they actually have a good reason for not paying it - like the delivery was incorrect, the invoice was added up wrong, or the invoice never even got to them because you sent it to the goods delivery address and not their invoicing address.
If you want to get ahead of your late paying customers, you need to give them that polite phone call to tell you if they've any problems with the invoice. If you don't ring them, the invoice will sit on their query pile until you sue them. At which point they will answer your solicitors letter with 'but we haven't paid the invoice because its incorrect'; you'll then have to work through the dispute with them, issue a new invoice for them to pay, and you've wasted the solicitors fees for something that you could have found out from a quick phone call.
A good customer who hadn't paid for a genuine reason, may be so cross that you sued them, they will go elsewhere! So you've incurred bank charges on the amount he owes you, solicitors fees to sue him, and now you've lost a good customer. All because you were embarrassed to ring him.
Making those quick phone calls though, is something that many small businesses or their owners find uncomfortable or they simply don't have that time to sit in one place for the time it takes to ring round everyone who owes them money. Larger businesses will have a credit controller or a whole team of them. Its the credit controllers job to contact all their current customers. Make sure all the current invoices are ok to be paid this month, and if not, why not, and sort out any problems so that the invoice can be paid.
For a business, having a credit controller is as vital as having a sales team. There's no point having a brilliant sales team if all the sales they make are paid either late or not at all because no one follows up the money side of things after the sale is made!
Many smaller business owners have never heard of credit controllers, they just rely on bank borrowing to bridge the gap between the sale being made and the customer finally paying.
Some smaller businesses will use freelance credit control. Someone who just comes in on a regular basis for a small amount of time each week or month to make sure all the customers are happy and paying on time.
The fact is that late paying customers are paying late because you let them. Many many businesses now have a payment procedure that starts with 'don't pass this invoice for payment until the supplier chases for it'. So f you are embarrassed to chase for it, you won't even make it onto their payments list at all. Ever.
If you don't ever ring them up to politely ask when you can expect to be paid, you'll never find out if they actually have a good reason for not paying it - like the delivery was incorrect, the invoice was added up wrong, or the invoice never even got to them because you sent it to the goods delivery address and not their invoicing address.
If you want to get ahead of your late paying customers, you need to give them that polite phone call to tell you if they've any problems with the invoice. If you don't ring them, the invoice will sit on their query pile until you sue them. At which point they will answer your solicitors letter with 'but we haven't paid the invoice because its incorrect'; you'll then have to work through the dispute with them, issue a new invoice for them to pay, and you've wasted the solicitors fees for something that you could have found out from a quick phone call.
A good customer who hadn't paid for a genuine reason, may be so cross that you sued them, they will go elsewhere! So you've incurred bank charges on the amount he owes you, solicitors fees to sue him, and now you've lost a good customer. All because you were embarrassed to ring him.
Making those quick phone calls though, is something that many small businesses or their owners find uncomfortable or they simply don't have that time to sit in one place for the time it takes to ring round everyone who owes them money. Larger businesses will have a credit controller or a whole team of them. Its the credit controllers job to contact all their current customers. Make sure all the current invoices are ok to be paid this month, and if not, why not, and sort out any problems so that the invoice can be paid.
For a business, having a credit controller is as vital as having a sales team. There's no point having a brilliant sales team if all the sales they make are paid either late or not at all because no one follows up the money side of things after the sale is made!
Many smaller business owners have never heard of credit controllers, they just rely on bank borrowing to bridge the gap between the sale being made and the customer finally paying.
Some smaller businesses will use freelance credit control. Someone who just comes in on a regular basis for a small amount of time each week or month to make sure all the customers are happy and paying on time.
Simple Accounting - The Way to Go
Traditionally, keeping an account of outgoings and in-comings of one's private or even business undertaking is considered a difficult task; it can be really difficult to maintain a reasonable level of discipline. Many people will rather use their intuition to manage their affairs as only they can. Unfortunately, the majority of such people either fall into debt or end up in some other form of financial mess. I say some because a few people make it unscathed, sheer luck!
Accounting is not an easy task. It is even worse when an entrepreneur has to learn debits and credits. Small businesses are usually limited in their funding to employ full-time accountants armed with expensive accounting packages.
Splashing out money on pricey accounting packages may be a waste of money and time as the scarce resources can be put to better use in the business. However, avoiding accounting tasks is usually a costly mistake as tax penalties and poor decisions usually follow. Using simple accounting solutions available online might be the answer.
Simple accounting solutions available online started as an attempt to get rid of all the jargon and complexity and also the cost that comes with current accounting packages by simplifying how daily bookkeeping and accounting is done and how it is delivered to the people that need them most at a low cost.
Some really easy to use online solutions that make simple accounting possible exist today. The task of recording sales, purchases and the cash of a business is a straightforward process. Putting it together in accounting language, and generating trial balances and financial statements is time-consuming and can be difficult to do. A simple accounting solution removes the difficulty. For example, it creates the space to create sales invoices and requests for payment and records the accounting side and reports.
Such online solutions are also easy to access for the first time and they get easier and easier to use as the business person continues to operate them.
Simple accounting solutions also simplify the preparing accounts for tax filing and other forms of compliance with the help part-time accountant, but the most important advantage is how the business owner's ability to make informed decisions about the business is improved. This may not be considered a big deal, but in reality, the business owner does not have the time to create reports in the office or the money to waste on fancy systems. With simple accounting solutions online, all a business owner needs to maintain up-to-date records and view reports is a smart phone or mobile devise with connection internet. To put it another way, a business owner's accounting solution can fit into a pocket and will go everywhere, and will be available at any time. This is simplicity and efficiency all rolled into one.
Some of such online solutions available today come with a lot of free value adding services like customised email for sending invoices and reminders for payment that help improve cash flow and business efficiency in general. In fact, some of the solutions provide key date notifications that enable business owner stay up-to-date with important things such as tax filing date and accounts completion dates.
Accounting is not an easy task. It is even worse when an entrepreneur has to learn debits and credits. Small businesses are usually limited in their funding to employ full-time accountants armed with expensive accounting packages.
Splashing out money on pricey accounting packages may be a waste of money and time as the scarce resources can be put to better use in the business. However, avoiding accounting tasks is usually a costly mistake as tax penalties and poor decisions usually follow. Using simple accounting solutions available online might be the answer.
Simple accounting solutions available online started as an attempt to get rid of all the jargon and complexity and also the cost that comes with current accounting packages by simplifying how daily bookkeeping and accounting is done and how it is delivered to the people that need them most at a low cost.
Some really easy to use online solutions that make simple accounting possible exist today. The task of recording sales, purchases and the cash of a business is a straightforward process. Putting it together in accounting language, and generating trial balances and financial statements is time-consuming and can be difficult to do. A simple accounting solution removes the difficulty. For example, it creates the space to create sales invoices and requests for payment and records the accounting side and reports.
Such online solutions are also easy to access for the first time and they get easier and easier to use as the business person continues to operate them.
Simple accounting solutions also simplify the preparing accounts for tax filing and other forms of compliance with the help part-time accountant, but the most important advantage is how the business owner's ability to make informed decisions about the business is improved. This may not be considered a big deal, but in reality, the business owner does not have the time to create reports in the office or the money to waste on fancy systems. With simple accounting solutions online, all a business owner needs to maintain up-to-date records and view reports is a smart phone or mobile devise with connection internet. To put it another way, a business owner's accounting solution can fit into a pocket and will go everywhere, and will be available at any time. This is simplicity and efficiency all rolled into one.
Some of such online solutions available today come with a lot of free value adding services like customised email for sending invoices and reminders for payment that help improve cash flow and business efficiency in general. In fact, some of the solutions provide key date notifications that enable business owner stay up-to-date with important things such as tax filing date and accounts completion dates.
General Information About Wireless Merchant Accounts
These days, more and more people rely on credit and debit cards for their purchases. Cash seems to be passé, as cards fill wallets instead of money. In fact, an estimated $2.5 trillion worth of transactions are processed by credit cards. Businesses have had to keep up with demand, as they move toward a more cashless system. Wireless merchant accounts are the perfect solution for those businesses.
Thanks to modern technology, wireless merchant accounts are available for industries and companies that go door to door, or are mobile. This is ideal for trade shows, meetings, networking events and anywhere potential customers may be. Everyone from electricians, plumbers to craft vendors will benefit from a wireless merchant account.
Wireless merchant accounts act just like regular bank accounts that receive payments from various credit card transactions for goods and services. Like other merchant accounts, there are fees associated; however, payment processing merchant accounts are not as expensive as you may think: in fact, it has become a very affordable option for both small and medium sized businesses. When you think about how many customers you may be missing out on by not having one, the cost actually becomes nominal.
Most companies charge a fee per transaction, as well as a percentage of the total. They may also charge a set up fee, and a monthly fee. It's important to compare rates and companies, as each will have a different wireless payment processing plan. Generally, the per transaction fee can range from.10 cents to.25 cents. Monthly rates can be anywhere from $20 - $25. Percentages can range from 1% - 2%. Be sure to ask questions of the prospective company and get all details and charges in writing. Read the fine print, as this is where most of the rate charges and explanations are.
When you are comparing rates and fees, try to think of your future business needs as well as your present needs. You may only do ten transactions per month right now, but in the next six months, you may project fifteen or twenty transactions. This will affect which merchant account plan and company you decide on. For example, some companies have extra fees for anything over ten transactions per month. As them about their different plans that are available to you as your business grows.
The mobile handheld device has a card reader just as the non-mobile devices do; they are just as quick to process payments, both debit cards and credit cards. Customers will appreciate the convenience and they can be assured that their financial information is just as secure as with other types of processing devices. The card's black strip is read by a computer chip, and then electronically sent to the customer's bank for approval. Authorization is obtained, and a receipt can be printed.
Obtaining a wireless merchant account takes some planning and consideration, but is well worth it, both your business and your customers. The days of carrying cash and carbon copy visa receipts are long gone, as technology has evolved.
Thanks to modern technology, wireless merchant accounts are available for industries and companies that go door to door, or are mobile. This is ideal for trade shows, meetings, networking events and anywhere potential customers may be. Everyone from electricians, plumbers to craft vendors will benefit from a wireless merchant account.
Wireless merchant accounts act just like regular bank accounts that receive payments from various credit card transactions for goods and services. Like other merchant accounts, there are fees associated; however, payment processing merchant accounts are not as expensive as you may think: in fact, it has become a very affordable option for both small and medium sized businesses. When you think about how many customers you may be missing out on by not having one, the cost actually becomes nominal.
Most companies charge a fee per transaction, as well as a percentage of the total. They may also charge a set up fee, and a monthly fee. It's important to compare rates and companies, as each will have a different wireless payment processing plan. Generally, the per transaction fee can range from.10 cents to.25 cents. Monthly rates can be anywhere from $20 - $25. Percentages can range from 1% - 2%. Be sure to ask questions of the prospective company and get all details and charges in writing. Read the fine print, as this is where most of the rate charges and explanations are.
When you are comparing rates and fees, try to think of your future business needs as well as your present needs. You may only do ten transactions per month right now, but in the next six months, you may project fifteen or twenty transactions. This will affect which merchant account plan and company you decide on. For example, some companies have extra fees for anything over ten transactions per month. As them about their different plans that are available to you as your business grows.
The mobile handheld device has a card reader just as the non-mobile devices do; they are just as quick to process payments, both debit cards and credit cards. Customers will appreciate the convenience and they can be assured that their financial information is just as secure as with other types of processing devices. The card's black strip is read by a computer chip, and then electronically sent to the customer's bank for approval. Authorization is obtained, and a receipt can be printed.
Obtaining a wireless merchant account takes some planning and consideration, but is well worth it, both your business and your customers. The days of carrying cash and carbon copy visa receipts are long gone, as technology has evolved.
What Makes a Good CPA?
As tax time comes to a close, I find myself once again thinking "phew, I'm glad that's over." It's also around this time of year when I think about how tedious tax preparation can be. If my lifestyle were any simpler then I suppose my tax preparation would be as well. Understanding all the various aspects of the tax code may truly be an act of futility. For that reason praise must be given to the men and women who have chosen a career replete with number crunching and studying tax preparation. These people are the accountants of the world.
Since I find it such a chore to prepare my own taxes I look to accountants for aid. Therefore, one may ask the question, "what makes an accountant worthy to toil through all of my receipts, W-2's, 1099's and various other itemized deductions?" To help answer that, I have come up with several attributes that I look for when trying to choose a good accountant.
Without a doubt one of the best attributes is knowledge of the tax laws. A well educated accountant is invaluable to the tax payer. Some people who have prepared taxes for individuals or businesses make claims about their experience in dealing with the IRS. No matter what their experience may be, many of them are not Certified Public Accountants. For me having the 3 letters "CPA" included on the tax preparers title brings comfort my mind because it shows at least that my tax preparer has been trained. Those 3 letters also imply accuracy and dedication.
Along with knowledge of the well trained CPA, a good quality for an accountant is punctuality of services. I understand that the client needs to present his/her tax documents in a timely manner so the preparer can meet specified deadlines. However, professionalism by staying ahead of the game and filing extensions when deemed appropriate are valuable weapons that I like to see in the CPA's arsenal.
Since there is a lot of responsibility placed on the client as well for accuracy when filling out tax documents, there are times when the client needs advice or coaching. Therefore, another great attribute of the CPA is availability. There have been countless times when looking at my tax paperwork confusion over certain things creates consternation. Being able to get a hold of any accountant knowledgeable of my circumstances may be a daunting task especially when dealing with a large accounting firm.
After reaching my accountant and relaying my concerns, the next attribute of importance is communication. As much as I admire professionals and the knowledge they possess in their area of expertise, sometimes they forget that not everyone understands their vernacular. Some questions are answered using verbiage that can leave you more confused than before you posed the question. Speaking plainly to the client about concerns can oftentimes be very refreshing.
Since I find it such a chore to prepare my own taxes I look to accountants for aid. Therefore, one may ask the question, "what makes an accountant worthy to toil through all of my receipts, W-2's, 1099's and various other itemized deductions?" To help answer that, I have come up with several attributes that I look for when trying to choose a good accountant.
Without a doubt one of the best attributes is knowledge of the tax laws. A well educated accountant is invaluable to the tax payer. Some people who have prepared taxes for individuals or businesses make claims about their experience in dealing with the IRS. No matter what their experience may be, many of them are not Certified Public Accountants. For me having the 3 letters "CPA" included on the tax preparers title brings comfort my mind because it shows at least that my tax preparer has been trained. Those 3 letters also imply accuracy and dedication.
Along with knowledge of the well trained CPA, a good quality for an accountant is punctuality of services. I understand that the client needs to present his/her tax documents in a timely manner so the preparer can meet specified deadlines. However, professionalism by staying ahead of the game and filing extensions when deemed appropriate are valuable weapons that I like to see in the CPA's arsenal.
Since there is a lot of responsibility placed on the client as well for accuracy when filling out tax documents, there are times when the client needs advice or coaching. Therefore, another great attribute of the CPA is availability. There have been countless times when looking at my tax paperwork confusion over certain things creates consternation. Being able to get a hold of any accountant knowledgeable of my circumstances may be a daunting task especially when dealing with a large accounting firm.
After reaching my accountant and relaying my concerns, the next attribute of importance is communication. As much as I admire professionals and the knowledge they possess in their area of expertise, sometimes they forget that not everyone understands their vernacular. Some questions are answered using verbiage that can leave you more confused than before you posed the question. Speaking plainly to the client about concerns can oftentimes be very refreshing.
Managed Credit Control Services the Key to a Healthy Cash Flow?
There was a study relating to personal goals, done by a US university that proved the power of written down goals. If memory serves me well a written down goal or target is 80% more likely to be achieved. This is particularly true in business where the goal may be set by one person to be achieved by another. Writing it down removes areas of grey and helps communicate the task more accurately.
This approach is very important with any business critical function of which Credit Control is one. With this in mind, it is astounding how many companies muddle through Credit Control in crisis management mode with no real strategy or documented process. We have written a very short list of tips that first appeared in the Independent newspaper's Cash Flow Management supplement. I have expanded it slightly here, it is simple, but if you have nothing in place at present it use it as a start point.
Where to Start?
First of all, work out your current performance and compare with your offered terms. The most common measure of the effectiveness of your credit control process is Day Sales Outstanding (DSO) which is an average measure of the number of days it takes for invoices to be settled:
(Total Debt/Annual Turnover) x 365 = DSO in Days (for an annual overview)
Compare this number to terms offered. If your terms are 30 days and you are collecting on average in 45 days then you are doing well. If it is taking nearer 90 days for people to pay then attention is needed.
Also look at the effect of reducing your outstanding debt by 10%, 20% & 30%. If 20% of our outstanding debt is a significant amount of money for your business, then spending time on improving process is worth while.
Define and document your process:
A Credit Control Process needs to have
• An Owner responsible for managing and ensuring the regular performance
• A defined start point, generally derived from the invoice date
• Clear subsequent steps that will be followed until payment is received
• A time bound plan for the course of action where payment is not received after a defined period
• Some measures, as a minimum Day Sales Outstanding should be monitored
• Diarised reviews of the measures and process effectiveness
Chase Method
Voice communication is the mainstay of effective Credit Control. Letter and email are generally only an option for low value invoices and great for follow up and confirmation of what has been said and agreed.
Start early:
Commence chase activity before the payment is due with a pre-emptive service call. If there is an issue it is better to discover and rectify before payment becomes overdue.
Clear escalation
A decision point after which Debt Recovery procedures commences is advisable. Delay can be costly, and in some cases has resulted in a loss that could have been avoided with prompt action.
Keep an eye on your customers
Changing circumstances can often reveal themselves first as a change in payment behavior or a request for extended terms. Automate some monitoring if budgets allow, where manual methods re used schedule a regular review to ensure you are up to date with the health of your customers.
Finally
Ensure that the chase activity is performed as consistently, as with any other a time-bound operation. Credit Control is a critical final step in the sales process, a sale is not really made and closed until you have been paid.
Run your new process for a period of time (3 months) and then review against your measures, making adjustments if needed. An initial 10% improvement in cash flow should be reasonably easy to achieve with focus. If volumes are too much to cope with, ramp up resource with a temp or ask a credit control service provider for support rather than let calling slip. The faster you collect you cash, the lower the risk of you being caught by customer insolvency. Once they are gone, they are gone; generally with most if not all of your money and all of your profit, so a few extra pounds spent on adequate resources should pay back in the long run.
This approach is very important with any business critical function of which Credit Control is one. With this in mind, it is astounding how many companies muddle through Credit Control in crisis management mode with no real strategy or documented process. We have written a very short list of tips that first appeared in the Independent newspaper's Cash Flow Management supplement. I have expanded it slightly here, it is simple, but if you have nothing in place at present it use it as a start point.
Where to Start?
First of all, work out your current performance and compare with your offered terms. The most common measure of the effectiveness of your credit control process is Day Sales Outstanding (DSO) which is an average measure of the number of days it takes for invoices to be settled:
(Total Debt/Annual Turnover) x 365 = DSO in Days (for an annual overview)
Compare this number to terms offered. If your terms are 30 days and you are collecting on average in 45 days then you are doing well. If it is taking nearer 90 days for people to pay then attention is needed.
Also look at the effect of reducing your outstanding debt by 10%, 20% & 30%. If 20% of our outstanding debt is a significant amount of money for your business, then spending time on improving process is worth while.
Define and document your process:
A Credit Control Process needs to have
• An Owner responsible for managing and ensuring the regular performance
• A defined start point, generally derived from the invoice date
• Clear subsequent steps that will be followed until payment is received
• A time bound plan for the course of action where payment is not received after a defined period
• Some measures, as a minimum Day Sales Outstanding should be monitored
• Diarised reviews of the measures and process effectiveness
Chase Method
Voice communication is the mainstay of effective Credit Control. Letter and email are generally only an option for low value invoices and great for follow up and confirmation of what has been said and agreed.
Start early:
Commence chase activity before the payment is due with a pre-emptive service call. If there is an issue it is better to discover and rectify before payment becomes overdue.
Clear escalation
A decision point after which Debt Recovery procedures commences is advisable. Delay can be costly, and in some cases has resulted in a loss that could have been avoided with prompt action.
Keep an eye on your customers
Changing circumstances can often reveal themselves first as a change in payment behavior or a request for extended terms. Automate some monitoring if budgets allow, where manual methods re used schedule a regular review to ensure you are up to date with the health of your customers.
Finally
Ensure that the chase activity is performed as consistently, as with any other a time-bound operation. Credit Control is a critical final step in the sales process, a sale is not really made and closed until you have been paid.
Run your new process for a period of time (3 months) and then review against your measures, making adjustments if needed. An initial 10% improvement in cash flow should be reasonably easy to achieve with focus. If volumes are too much to cope with, ramp up resource with a temp or ask a credit control service provider for support rather than let calling slip. The faster you collect you cash, the lower the risk of you being caught by customer insolvency. Once they are gone, they are gone; generally with most if not all of your money and all of your profit, so a few extra pounds spent on adequate resources should pay back in the long run.
Frequently Asked Questions about Outsourcing CPAs
Why do businesses resort to outsourcing accounting functions?
Most businesses resort to outsourcing CPA functions of in-house accounting services for the following reasons:
· Top employee resigns and key accounting jobs are neglected.
· Outsourcing CPA functions lessens, if not removes, recruitment and training costs
· Employee commits a serious offense against company rules and regulations like fraudulence, dishonesty or fund embezzlement, culmination in his/her termination
· To increase transaction volumes that staff are unable to accomplish on time
· Acknowledgment that outsourcing CPAs can bring favorable results such as speed up management of payables as well as the collection of receivables, and upgrade the level of vendor financing among others.
· Immediate need for administrative or fiscal management of business processes [such as] assist projects, provisions for maternity leave, coverage for military service and illnesses, business reorganization or relocation prospects.
If there is already an in-house bookkeeper, why is there still a need for outsourcing CPA functions?
Bookkeepers see to it that accounting records of pertinent monetary transactions are regularly updated. However, when companies begin outsourcing CPAs, they can improve their current cashflow and create a sturdy database for all their accounting records. In effect, the service provider assumes a proactive role in the operations of the entire process, including accounts payable or accounts receivable. What's more, CPA outsourcing firms provide bookkeeping services that are half the rate charged by in-house bookkeepers - yet just as, if not even more, efficient.
Will outsourcing CPA functions obliterate my need for a company accountant?
Of course not. Company CPAs provide services that are altogether different. Sub-contractor company CPA functions involve business advisory, preparation of financial statements as well as federal and state tax returns, and compiling and submission of necessary reporting documents like those required by the bank. Financial planning, structuring and management should rest on the shoulders of in-house accountants.
However, when you resort to outsourcing CPA functions to a third party service provider, you will be able to get things done on a daily basis. Outsourcing CPA work goes beyond advising and preparing financial statements or income tax returns. CPA service providers overseas see to it that core accounting functions are attended to and solidify the company's CPA foundations. They do all the dirty accounting work, which can be time-consuming and can distract the management from attending to more pressing matters. Rest assured, outsourcing CPA functions is an answer to companies' back office but heavy-weight accounting problems and not just minor ones.
Supposing I do not have costly financial and administrative procedures, should outsourcing CPAs still work for me?
Cost is not the only reasons businesses opt for outsourcing CPA functions. One other consideration would be to reduce the complexity of their present accounting records. They are in need of a viable CPA method that can work better for their respective companies, regardless of size and social standing. The fact is, though some business processes are not costly, they are either too complicated to help the company gain advantage or the management is not aware of its own business processes due to other pressing concerns. Rather than spending time on the process, they could utilize these spare moments in planning for and developing the business to satisfy consumer needs.
Besides, financial and administrative tasks are always the priority which is why they usually do not get done well or punctually. Tasks like payroll processing need a sufficient amount of knowledge and accuracy. Thus, they are usually the first process that management identifies as compatible to outsourcing.
Will I still retain control of my CPA processes if I outsource them?
For certain, you will not. Outsourcing CPA processes actually boosts up your business prospects and guides you properly in making decisions. You can delegate all the necessary information to us service providers by outsourcing CPA functions to us and in so doing, you increase your level of control.
Take for instance if you outsource your accounts payable service. This can help your company select directly the vendors to be paid, or permit you to institute policies on the direction selection process. Outsourcing accounting work of this nature can prevent any unauthorized disbursements. Moreover, a weekly or biweekly system of payments to vendors may be established, but with fully equipped accommodations on receiving goods COD.
If my company data is highly confidential, is it still viable to proceed with outsourcing CPA functions?
Fear not when outsourcing CPA work. You can guarantee that all data are considered confidential by accounting service providers. Whether the client says so explicitly or not, offshore outsourced accounting firms treat their clients' data with respect and value. Our computerized accounting systems, as well as necessary backup data are much secured and we store all hard data copies with utmost caution. Outsourcing CPA functions actually increases your data security, giving you the confidentiality you need.
If I prefer to retain my company's financial data on my existing accounting system, then does it dispense the need for outsourcing?
Certainly not. CPA outsourcing will always be a viable alternative for your company. The only necessary condition is for your site to have a high-speed internet connection, so we can efficiently operate your accounting system at a distance. This is more practical on your part as you would be spared from unending investments on new hardware and software to back up your existing accounting system or upgrade or convert your current data. It is also a viable alternative to allow the CPA service provider to "host" your accounting system remotely from their service site. You can also relocate your hardware to where the company is located or simply re-install and operate your software their server. The third cost-efficient option is to utilize an internet-based accounting package readily available on the World Wide Web.
What if I only want to seek for counsel and advise regarding how I and my staff should run our accounting processes - not necessarily turn over the accounting?
Outsourced CPA service providers are hands-on. Their primary aim is to do the work for you instead of merely advising you and your staff. Yet if you feel that consulting about rather than outsourcing CPA functions is what your company needs, we can do this for you too. However, in general, accounting service providers feel that this will only add more costs to your company. In addition, improvement and solutions for your accounting will only be limited. As they have the goal of giving you the best and affordable way to utilize your CPAs, outsourcing firms would always give the same advice: outsource and not just consult.
If I outsource CPA work, will I not increase my exposure to dishonest and fraudulent acts?
It is certainly true that there is a widespread case of employee dishonesty and fraud nowadays and almost every employer in the world has been a victim. However, these may be the result of weak internal control and lenient recruiting and supervision on the part of management, which instead facilitates the flow of dishonest and fraudulent acts.
If you outsource your pertinent CPA functions to third party service providers, the employees they hire are on a contractual basis and each of them are commissioned to sign a "terms of employment" document, which makes dishonest and fraudulent acts very much transparent causes for instant termination.
Procedures are also properly documented when outsourcing CPA functions to third party service providers. These providers also operate on a team-based environment in an office open enough to make any act of dishonesty and fraudulence difficult to hide.
Another attractive thing about outsourcing your CPAs to service providers abroad is that their processes are designed to effectively impose internal controls that aim to minimize the possibility of dishonesty and fraudulence and increase the chances of discovering them - no matter how small. There are also insurance programs that enable these CPA service providers to underwrite losses in the unfortunate occurrence of one.
Although the existence of dishonesty and fraud cannot exactly be prevented from occurring, it is highly recognized that outsourcing accounting functions answers a big chunk of this workforce problem.
Most businesses resort to outsourcing CPA functions of in-house accounting services for the following reasons:
· Top employee resigns and key accounting jobs are neglected.
· Outsourcing CPA functions lessens, if not removes, recruitment and training costs
· Employee commits a serious offense against company rules and regulations like fraudulence, dishonesty or fund embezzlement, culmination in his/her termination
· To increase transaction volumes that staff are unable to accomplish on time
· Acknowledgment that outsourcing CPAs can bring favorable results such as speed up management of payables as well as the collection of receivables, and upgrade the level of vendor financing among others.
· Immediate need for administrative or fiscal management of business processes [such as] assist projects, provisions for maternity leave, coverage for military service and illnesses, business reorganization or relocation prospects.
If there is already an in-house bookkeeper, why is there still a need for outsourcing CPA functions?
Bookkeepers see to it that accounting records of pertinent monetary transactions are regularly updated. However, when companies begin outsourcing CPAs, they can improve their current cashflow and create a sturdy database for all their accounting records. In effect, the service provider assumes a proactive role in the operations of the entire process, including accounts payable or accounts receivable. What's more, CPA outsourcing firms provide bookkeeping services that are half the rate charged by in-house bookkeepers - yet just as, if not even more, efficient.
Will outsourcing CPA functions obliterate my need for a company accountant?
Of course not. Company CPAs provide services that are altogether different. Sub-contractor company CPA functions involve business advisory, preparation of financial statements as well as federal and state tax returns, and compiling and submission of necessary reporting documents like those required by the bank. Financial planning, structuring and management should rest on the shoulders of in-house accountants.
However, when you resort to outsourcing CPA functions to a third party service provider, you will be able to get things done on a daily basis. Outsourcing CPA work goes beyond advising and preparing financial statements or income tax returns. CPA service providers overseas see to it that core accounting functions are attended to and solidify the company's CPA foundations. They do all the dirty accounting work, which can be time-consuming and can distract the management from attending to more pressing matters. Rest assured, outsourcing CPA functions is an answer to companies' back office but heavy-weight accounting problems and not just minor ones.
Supposing I do not have costly financial and administrative procedures, should outsourcing CPAs still work for me?
Cost is not the only reasons businesses opt for outsourcing CPA functions. One other consideration would be to reduce the complexity of their present accounting records. They are in need of a viable CPA method that can work better for their respective companies, regardless of size and social standing. The fact is, though some business processes are not costly, they are either too complicated to help the company gain advantage or the management is not aware of its own business processes due to other pressing concerns. Rather than spending time on the process, they could utilize these spare moments in planning for and developing the business to satisfy consumer needs.
Besides, financial and administrative tasks are always the priority which is why they usually do not get done well or punctually. Tasks like payroll processing need a sufficient amount of knowledge and accuracy. Thus, they are usually the first process that management identifies as compatible to outsourcing.
Will I still retain control of my CPA processes if I outsource them?
For certain, you will not. Outsourcing CPA processes actually boosts up your business prospects and guides you properly in making decisions. You can delegate all the necessary information to us service providers by outsourcing CPA functions to us and in so doing, you increase your level of control.
Take for instance if you outsource your accounts payable service. This can help your company select directly the vendors to be paid, or permit you to institute policies on the direction selection process. Outsourcing accounting work of this nature can prevent any unauthorized disbursements. Moreover, a weekly or biweekly system of payments to vendors may be established, but with fully equipped accommodations on receiving goods COD.
If my company data is highly confidential, is it still viable to proceed with outsourcing CPA functions?
Fear not when outsourcing CPA work. You can guarantee that all data are considered confidential by accounting service providers. Whether the client says so explicitly or not, offshore outsourced accounting firms treat their clients' data with respect and value. Our computerized accounting systems, as well as necessary backup data are much secured and we store all hard data copies with utmost caution. Outsourcing CPA functions actually increases your data security, giving you the confidentiality you need.
If I prefer to retain my company's financial data on my existing accounting system, then does it dispense the need for outsourcing?
Certainly not. CPA outsourcing will always be a viable alternative for your company. The only necessary condition is for your site to have a high-speed internet connection, so we can efficiently operate your accounting system at a distance. This is more practical on your part as you would be spared from unending investments on new hardware and software to back up your existing accounting system or upgrade or convert your current data. It is also a viable alternative to allow the CPA service provider to "host" your accounting system remotely from their service site. You can also relocate your hardware to where the company is located or simply re-install and operate your software their server. The third cost-efficient option is to utilize an internet-based accounting package readily available on the World Wide Web.
What if I only want to seek for counsel and advise regarding how I and my staff should run our accounting processes - not necessarily turn over the accounting?
Outsourced CPA service providers are hands-on. Their primary aim is to do the work for you instead of merely advising you and your staff. Yet if you feel that consulting about rather than outsourcing CPA functions is what your company needs, we can do this for you too. However, in general, accounting service providers feel that this will only add more costs to your company. In addition, improvement and solutions for your accounting will only be limited. As they have the goal of giving you the best and affordable way to utilize your CPAs, outsourcing firms would always give the same advice: outsource and not just consult.
If I outsource CPA work, will I not increase my exposure to dishonest and fraudulent acts?
It is certainly true that there is a widespread case of employee dishonesty and fraud nowadays and almost every employer in the world has been a victim. However, these may be the result of weak internal control and lenient recruiting and supervision on the part of management, which instead facilitates the flow of dishonest and fraudulent acts.
If you outsource your pertinent CPA functions to third party service providers, the employees they hire are on a contractual basis and each of them are commissioned to sign a "terms of employment" document, which makes dishonest and fraudulent acts very much transparent causes for instant termination.
Procedures are also properly documented when outsourcing CPA functions to third party service providers. These providers also operate on a team-based environment in an office open enough to make any act of dishonesty and fraudulence difficult to hide.
Another attractive thing about outsourcing your CPAs to service providers abroad is that their processes are designed to effectively impose internal controls that aim to minimize the possibility of dishonesty and fraudulence and increase the chances of discovering them - no matter how small. There are also insurance programs that enable these CPA service providers to underwrite losses in the unfortunate occurrence of one.
Although the existence of dishonesty and fraud cannot exactly be prevented from occurring, it is highly recognized that outsourcing accounting functions answers a big chunk of this workforce problem.
Accounting Services for Small Businesses Made Easy
Recording the movement of funds in any business is an essential task that is regulated by government agencies such as the ATO and ASIC. Large companies typically hire bookkeepers, registered accountants and a team of accounting clerks to keep business records accurate, accounts up-to-date and financial statements timely lodged. While small businesses still need the same bookkeeping support, the associated costs make it unfeasible to maintain a regular team for accounting and services related to record-keeping. An online accounting service that is less expensive, reliable and professional is the ideal solution for small businesses.
Benefits of accounts on line services
Access to accounting services: Internet technology and sophisticated applications enable professionals to render services offsite or remotely to any location with Internet access. Services such as consulting, copywriting, and bookkeeping are among the increasing number of activities that are available to businesses. The quality of accounting services, whether onsite or offsite, remains the same because the system is based on standard accounting procedures.
Less accounting errors: Accuracy and correctness are important features of bookkeeping. Following a system developed and overseen by an accounting expert minimizes and addresses any accounting problems at the earliest opportunity so clients are assured of relevant financial data that pass the scrutiny of government agencies.
Time saver: With a professional service taking care of the essential bookkeeping tasks, business owners have more time to focus on other equally important aspects of the business such as marketing, product and business development and sales.
Cost savings: Professional fees are ordinarily time-based and can amount to large sums, most of which may be for the accountant's travel time. An offsite or remote service eliminates this cost which results in significant savings for a business. An external service also eliminates the need to hire a regular bookkeeper, freeing up resources for other operating expenses.
Benefits of accounts on line services
Access to accounting services: Internet technology and sophisticated applications enable professionals to render services offsite or remotely to any location with Internet access. Services such as consulting, copywriting, and bookkeeping are among the increasing number of activities that are available to businesses. The quality of accounting services, whether onsite or offsite, remains the same because the system is based on standard accounting procedures.
Less accounting errors: Accuracy and correctness are important features of bookkeeping. Following a system developed and overseen by an accounting expert minimizes and addresses any accounting problems at the earliest opportunity so clients are assured of relevant financial data that pass the scrutiny of government agencies.
Time saver: With a professional service taking care of the essential bookkeeping tasks, business owners have more time to focus on other equally important aspects of the business such as marketing, product and business development and sales.
Cost savings: Professional fees are ordinarily time-based and can amount to large sums, most of which may be for the accountant's travel time. An offsite or remote service eliminates this cost which results in significant savings for a business. An external service also eliminates the need to hire a regular bookkeeper, freeing up resources for other operating expenses.
Reasons to Engage a Local Firm
Whether you're a business, organisation or just a person in need of financial advice, it's always wise to seek counsel from an accountant. Exeter, fortunately has a large number of accountancy firms and single practitioners who stand ready to help with virtually any type of finance- or accounting-related issue. These skilled professionals provide a wide variety of accounting services, and it's important to choose a local accountant for many reasons. For example, only a locally based firm will have a deep understanding of and experience with financial matters in Exeter and its environs. Such a firm can best serve the unique and specific needs of the city's residents and businesses. Read on for some important information about engaging an accountant in this vibrant city.
About Exeter's Financial Climate
The financial climate in Exeter is quite diverse. Businesses and organisations have one set of needs and requirements, and individuals have another. Exeter-based accountancy professionals offer a wide range of services that are tailored to match the specific needs of persons and businesses in the city. Such services include, but are not limited to:
Exeter's positive business climate is the result of a conscious and optimistic collaboration that exists between the city's business and civic leaders, and also amongst the towns and villages in the region. This has created a highly successful partnership that fosters, controls and manages change in an effective and dynamic way. Exeter is an energetic, ambitious city with a strong commitment to supporting innovation and encouraging positive change. To support such a progressive vision, a stable financial infrastructure is essential. So, it makes good sense to manage and secure your personal or business financial affairs by engaging a local accountant. Exeter firms stand ready to help, and can do a great deal to help clients understand and exploit the many opportunities that exist in the region. Here are some key points to consider when making your choice.
Choosing the Right Accountancy Firm
Before engaging a firm, it's important to have an in-depth understanding of your particular financial situation, requirements and needs. This will go a long way toward creating an effective relationship with an accountant. Exeter has a diverse financial climate, so it's important not to divide your business amongst multiple companies, because this fragmentation leaves you open to incorrect or conflicting decisions and actions. Be sure to check the credentials of any firm you're considering. It is you, not your accountant, who will be held responsible for any errors. Ensure that the accountancy firm carries indemnity insurance, which will protect you against any losses suffered as a consequence of their actions. Engaging an accountant is one of the best ways to protect yourself against financial disasters.
About Exeter's Financial Climate
The financial climate in Exeter is quite diverse. Businesses and organisations have one set of needs and requirements, and individuals have another. Exeter-based accountancy professionals offer a wide range of services that are tailored to match the specific needs of persons and businesses in the city. Such services include, but are not limited to:
- Business and personal taxation assistance, including value added tax
- Audit of statutory accounts
- Management accounting
- Manual or computerised bookkeeping
- Preparation of annual accounts
- Advice on buying or selling a business
- Retirement planning
- Succession planning
- Business planning
- Business plan evaluation, advice, and validation
- Due diligence
- Assistance with raising finance
Exeter's positive business climate is the result of a conscious and optimistic collaboration that exists between the city's business and civic leaders, and also amongst the towns and villages in the region. This has created a highly successful partnership that fosters, controls and manages change in an effective and dynamic way. Exeter is an energetic, ambitious city with a strong commitment to supporting innovation and encouraging positive change. To support such a progressive vision, a stable financial infrastructure is essential. So, it makes good sense to manage and secure your personal or business financial affairs by engaging a local accountant. Exeter firms stand ready to help, and can do a great deal to help clients understand and exploit the many opportunities that exist in the region. Here are some key points to consider when making your choice.
Choosing the Right Accountancy Firm
Before engaging a firm, it's important to have an in-depth understanding of your particular financial situation, requirements and needs. This will go a long way toward creating an effective relationship with an accountant. Exeter has a diverse financial climate, so it's important not to divide your business amongst multiple companies, because this fragmentation leaves you open to incorrect or conflicting decisions and actions. Be sure to check the credentials of any firm you're considering. It is you, not your accountant, who will be held responsible for any errors. Ensure that the accountancy firm carries indemnity insurance, which will protect you against any losses suffered as a consequence of their actions. Engaging an accountant is one of the best ways to protect yourself against financial disasters.
About Professional Certification
Exeter is a city in transition. Like many urban centres, Exeter is undergoing significant change, much of which is financial. A survey of over 1400 residents was aimed at discovering which local government services were important, and which were less so. In the published results, civic spending was regarded as one of the least important discretionary services. In this era of increasing public clamour over government expenses in the city, accountants in Exeter play an important and critical role. To be successful, though, accountants are advised to acquire professional certifications that validate their skills. Here's a quick summary of some of the certifications available.
Types of Certifications Available for UK Accounting Professionals
Today's financial climate is quite complex, so it's no longer a simple matter just to obtain chartered accountant (CA) certification, and expect to have a prosperous career. There are many other certifications worth obtaining, including those from the following organisations:
Short answer: It depends. For example, if you wish to pursue a career in management accounting, then CIMA certification will be most valuable for those in the UK, Europe, Asia, and the Middle East. For accountants who intended to practice in the UK, CIMA also is a highly relevant certification, because it's considered an executive level accreditation. In addition, in the UK, the AAT and ACCA certification have value. AAT sometimes is considered an entry level certification for those who do not hold an accounting degree. AAT practitioners are familiar with issues relate to VAT, PAYE and others, and they are often referred to as "accounting technicians." For countries outside the UK, it's best to have CA (chartered accountant) credentials obtained from a certifying entity that is authorised to confer them. Certifications like that from ICMA in India and Pakistan are not widely recognized in the UK, so accountants in Exeter are advised to be circumspect regarding these.
Some Concrete Advice
Because accounting is a large, intricate, and diverse field, those who intend to obtain professional certifications need to do a thorough analysis of which certifications are the most relevant for them. It's also a good idea to investigate some of the newer categories of the profession, such as environmental and forensic accounting. In both Exeter and the UK at large, the competition for accounting jobs is fierce, so some due diligence may turn up an attractive niche that's a bit out of the mainstream, but still quite lucrative. Once you've picked your accounting sub-speciality, it's a simple matter to determine what certifications are required. Finally, be sure to consider is whether the certifications you're seeking are multinational, that is, are they recognised outside the UK?
In order to enhance their careers, accountants in Exeter should consider obtaining one or more of these important professional certifications.
Types of Certifications Available for UK Accounting Professionals
Today's financial climate is quite complex, so it's no longer a simple matter just to obtain chartered accountant (CA) certification, and expect to have a prosperous career. There are many other certifications worth obtaining, including those from the following organisations:
- Association of Chartered Certified Accountants (ACCA)
- Association of Accounting Technicians Certification (AAT)
- Certified Management Accountant (CMA)
- Certified Financial Manager (CFM)
- Chartered Institute of Management Accountants Certification (CIMA).
- Institute of Financial Accountants (IFA)
Short answer: It depends. For example, if you wish to pursue a career in management accounting, then CIMA certification will be most valuable for those in the UK, Europe, Asia, and the Middle East. For accountants who intended to practice in the UK, CIMA also is a highly relevant certification, because it's considered an executive level accreditation. In addition, in the UK, the AAT and ACCA certification have value. AAT sometimes is considered an entry level certification for those who do not hold an accounting degree. AAT practitioners are familiar with issues relate to VAT, PAYE and others, and they are often referred to as "accounting technicians." For countries outside the UK, it's best to have CA (chartered accountant) credentials obtained from a certifying entity that is authorised to confer them. Certifications like that from ICMA in India and Pakistan are not widely recognized in the UK, so accountants in Exeter are advised to be circumspect regarding these.
Some Concrete Advice
Because accounting is a large, intricate, and diverse field, those who intend to obtain professional certifications need to do a thorough analysis of which certifications are the most relevant for them. It's also a good idea to investigate some of the newer categories of the profession, such as environmental and forensic accounting. In both Exeter and the UK at large, the competition for accounting jobs is fierce, so some due diligence may turn up an attractive niche that's a bit out of the mainstream, but still quite lucrative. Once you've picked your accounting sub-speciality, it's a simple matter to determine what certifications are required. Finally, be sure to consider is whether the certifications you're seeking are multinational, that is, are they recognised outside the UK?
In order to enhance their careers, accountants in Exeter should consider obtaining one or more of these important professional certifications.
Online Accountant
The concept of an online accountant shows how quickly technology is improving the choices of people in need of accounting services. However, the definition of this type of professional depends on whose opinion is being sampled.
Many accountants have an online presence today, as the advantages are many. The communication and information power of the internet have proved unavoidable and email has become the dominant form of communication for businesses, including communication with their clients. Many accountants deliver accounts and reports to clients by email and consider themselves to be operating online. While this is true to a limited extent, an online accountant actually means an accountant whose services are entirely premised, marketed, performed and delivered online.
It means that the accounting package and actual entries into the books of accounts are woven and performed as part of a comprehensive online service. It is a much more than using email to send accounts or being able to file accounts online. It is putting the cheap resources of the internet to the best use securely.
They use the power and cost saving ability of the internet to simplify accounting and related tasks to make the lives of customers really easy. These days, newer, better and cheaper methods for saving cost such as limiting the amount of office space used to the most essential needs is one of the ways that businesses stay profitable. Others include reducing the use of office stationery such as especially paper, printing ink, printer maintenance etc, using shared services instead of costly dedicated personnel such as accountants and administrative staff and other associated staff costs like pensions and insurance are ways that smart businesses are keeping their costs down and in these difficult times.
The services of a real online accountant can be looked at as a shared services accounting department for companies serious about minimising cost. The truth is that the businessperson simply wants to get on with the main business while ensuring important support services like accounting, tax and administration are well taken care of.
They provide services based on time required for each customer. This means that he is a part-time accountant for each client, but a full-time accountant for all clients. The online account is a highly skilled and efficient accountant available to companies that will usually not be able to afford the service, but can now afford it because of the online model. They use the best of online accounting software that customers can safely and efficiently access to deliver service centre solution that meets business needs.
The emergence of this group of professionals means that businesses can outsource their accounts department except sensitive aspects such as bank payments and collection and processing of cheques. At the same time, businesses can log into their online accounts to see what is going on at anytime and from any location. This means that unlike the regular nine-to-five accountant, he is a 24-hour accountant. With this unlimited access, business customers are empowered because they are more aware of debtors or receivables, creditors or payables and other important reports.
Many accountants have an online presence today, as the advantages are many. The communication and information power of the internet have proved unavoidable and email has become the dominant form of communication for businesses, including communication with their clients. Many accountants deliver accounts and reports to clients by email and consider themselves to be operating online. While this is true to a limited extent, an online accountant actually means an accountant whose services are entirely premised, marketed, performed and delivered online.
It means that the accounting package and actual entries into the books of accounts are woven and performed as part of a comprehensive online service. It is a much more than using email to send accounts or being able to file accounts online. It is putting the cheap resources of the internet to the best use securely.
They use the power and cost saving ability of the internet to simplify accounting and related tasks to make the lives of customers really easy. These days, newer, better and cheaper methods for saving cost such as limiting the amount of office space used to the most essential needs is one of the ways that businesses stay profitable. Others include reducing the use of office stationery such as especially paper, printing ink, printer maintenance etc, using shared services instead of costly dedicated personnel such as accountants and administrative staff and other associated staff costs like pensions and insurance are ways that smart businesses are keeping their costs down and in these difficult times.
The services of a real online accountant can be looked at as a shared services accounting department for companies serious about minimising cost. The truth is that the businessperson simply wants to get on with the main business while ensuring important support services like accounting, tax and administration are well taken care of.
They provide services based on time required for each customer. This means that he is a part-time accountant for each client, but a full-time accountant for all clients. The online account is a highly skilled and efficient accountant available to companies that will usually not be able to afford the service, but can now afford it because of the online model. They use the best of online accounting software that customers can safely and efficiently access to deliver service centre solution that meets business needs.
The emergence of this group of professionals means that businesses can outsource their accounts department except sensitive aspects such as bank payments and collection and processing of cheques. At the same time, businesses can log into their online accounts to see what is going on at anytime and from any location. This means that unlike the regular nine-to-five accountant, he is a 24-hour accountant. With this unlimited access, business customers are empowered because they are more aware of debtors or receivables, creditors or payables and other important reports.
6 Reasons To Business Should Use Check Writing Software
Did you know that you can save a lot of time, money and hassle using check printing software capable of printing MICR numbers compared to either pre-printed checkbook checks or pre-printed computer checks?
Federal regulations require checks to have routing transit number and account numbers printed in MICR to reduce cheque fraud. If your checks don't have MICR numbers, banks will reject them. MICR stands for Magnetic Ink Character Recognition, which is a system for printing and reading numbers on a check. It uses a unique number font and prints them with a magnetic ink. This specialized printing speeds up bank processing and makes counterfeiting and forgeries more difficult.
There are two ways to get your checks encoded with MICR numbers. You can have your checks pre-printed with the required information printed in MICR, either in checkbook format or in page format for printing from your computer. Or you can print MICR numbers on blank check stock using MICR-capable check printing software.
There are several advantages to printing on blank check stock over using pre-printed checks:
Security
Printing cheques when you need them, rather than having pre-printed checks lying around, minimizes opportunities for someone to steal your checks. Plus, password-protected computerized data is safer from prying eyes than ledger books. It's also easy to create back-ups of the data should something happen to your computer or premises.
Convenience
Running out of checks is a pain. But when you use software to print on blank check stock, you never run out of checks and have to wait for new checks to arrive. A new supply of checks is as close as your local business supply store.
Save time
You can import your check data and print hundreds of cheques with just a few clicks. If you've ever written out payroll checks or paid bills by hand, you know how time consuming this is. Not only do you have to write each check individually, but then you have to log the payroll data into your accounting software. With check printing software, you input the data into your accounting software and a few more click exports it for printing.
Save money
Using blank check stock is much less expensive than having checks pre-printed. Plus, if you ever have to change banks or change your address or other information on your checks, you don't have to have new checks printed - you just change the information in your cheque writer and it prints the new information on the checks.
Report for tax time
Tax time is simplified with printing software. Just a few clicks of the mouse generates a full report of all the checks you've written in the past year.
Customize your check with logo to get your brand in the market place.
Pre-printed checks cost more than blank check stock, but getting those pre-printed checks customized with your logo and slogan runs up a really hefty price tag. Cheque software allows you to personalize your checks easily. Just upload your logo image to the software and it prints automatically. Customized checks are an easy way to promote your brand in the marketplace as you pay for goods and services.
Federal regulations require checks to have routing transit number and account numbers printed in MICR to reduce cheque fraud. If your checks don't have MICR numbers, banks will reject them. MICR stands for Magnetic Ink Character Recognition, which is a system for printing and reading numbers on a check. It uses a unique number font and prints them with a magnetic ink. This specialized printing speeds up bank processing and makes counterfeiting and forgeries more difficult.
There are two ways to get your checks encoded with MICR numbers. You can have your checks pre-printed with the required information printed in MICR, either in checkbook format or in page format for printing from your computer. Or you can print MICR numbers on blank check stock using MICR-capable check printing software.
There are several advantages to printing on blank check stock over using pre-printed checks:
Security
Printing cheques when you need them, rather than having pre-printed checks lying around, minimizes opportunities for someone to steal your checks. Plus, password-protected computerized data is safer from prying eyes than ledger books. It's also easy to create back-ups of the data should something happen to your computer or premises.
Convenience
Running out of checks is a pain. But when you use software to print on blank check stock, you never run out of checks and have to wait for new checks to arrive. A new supply of checks is as close as your local business supply store.
Save time
You can import your check data and print hundreds of cheques with just a few clicks. If you've ever written out payroll checks or paid bills by hand, you know how time consuming this is. Not only do you have to write each check individually, but then you have to log the payroll data into your accounting software. With check printing software, you input the data into your accounting software and a few more click exports it for printing.
Save money
Using blank check stock is much less expensive than having checks pre-printed. Plus, if you ever have to change banks or change your address or other information on your checks, you don't have to have new checks printed - you just change the information in your cheque writer and it prints the new information on the checks.
Report for tax time
Tax time is simplified with printing software. Just a few clicks of the mouse generates a full report of all the checks you've written in the past year.
Customize your check with logo to get your brand in the market place.
Pre-printed checks cost more than blank check stock, but getting those pre-printed checks customized with your logo and slogan runs up a really hefty price tag. Cheque software allows you to personalize your checks easily. Just upload your logo image to the software and it prints automatically. Customized checks are an easy way to promote your brand in the marketplace as you pay for goods and services.
Value for Money and Support for Accountants
Accountants, of all groups that work in business, are acutely aware of both value for money and confidentiality. This 'hyper awareness' of those two conditional needs puts them in a unique position when evaluating Managed File Transfer - they'll see instant benefits plus have all of the long lasting perks that come from upgrading from FTP or a similar solution to MFT.
From the outset
Accountants work in the exchange of information between themselves and clients - this data needs to flow easily and is designed to ensure that the right taxes and incentives are met at the right time. Couple this with deadlines and compliance needs, the system they use for storing and transferring files needs to be both robust and able to function in an environment of exchanging files between units. This need can be easily met by working with companies that provide solid information exchange - and allow accountants to securely share the results of their work with their clients for adjustment, discussion and filing. MFT fills a crucial gap in services that other software struggles to meet.
Accountants can also take advantage of filing and scheduling routines, allowing them to both provide their customers with information and supporting the shipping of that information to relevant authorities.
Accountancy basics
Understanding the strengths of MFT when using accountancy is crucial to setting up a solid sharing system. Without understanding the role that MFT plays, businesses can't make an informed decision and with the variety of solutions available, it's often easy to overlook the simple functions that make, or break the software. From the ability to schedule and support regular information transfer to seamless integration with the encryption software and email, it's easy to see how MFT is the best solution to several of the problems facing businesses. And with a tailored range of solutions available, it's often simple to choose the right software for the tasks at hand with ease.
Understanding the nature of accountancy needs
Accountants need to be sure that their paperwork is also protected - by eliminating static, paper files, the needs of the clients and their companies. By bringing the best to the table, MFT can allow accountants to store and share files - allowing the secure outsourcing and support of client files, without creating additional security needs. This is often crucial when dealing with clients who have their own confidentiality or compliance needs, but across the industry is one of the major reasons an MFT upgrade should be considered.
There are other needs that MFT meets - real-time sharing means that mistakes can be picked up and corrected quicker and that though leeway should always be built into filing on time, that there is no reliance on couriers or postal services.
Anthony Hodges is CEO of HANDD Business Solutions - Independent, Managed File Transfer specialists who provide award winning solutions to some of the largest public and private sector companies across Europe. HANDD provide file transfer solutions from leading MFT software vendors including IPSWITCH File Transfer, MessageWay, GlobalSCAPE, Linoma, South River Technologies and BOOLE Server.
From the outset
Accountants work in the exchange of information between themselves and clients - this data needs to flow easily and is designed to ensure that the right taxes and incentives are met at the right time. Couple this with deadlines and compliance needs, the system they use for storing and transferring files needs to be both robust and able to function in an environment of exchanging files between units. This need can be easily met by working with companies that provide solid information exchange - and allow accountants to securely share the results of their work with their clients for adjustment, discussion and filing. MFT fills a crucial gap in services that other software struggles to meet.
Accountants can also take advantage of filing and scheduling routines, allowing them to both provide their customers with information and supporting the shipping of that information to relevant authorities.
Accountancy basics
Understanding the strengths of MFT when using accountancy is crucial to setting up a solid sharing system. Without understanding the role that MFT plays, businesses can't make an informed decision and with the variety of solutions available, it's often easy to overlook the simple functions that make, or break the software. From the ability to schedule and support regular information transfer to seamless integration with the encryption software and email, it's easy to see how MFT is the best solution to several of the problems facing businesses. And with a tailored range of solutions available, it's often simple to choose the right software for the tasks at hand with ease.
Understanding the nature of accountancy needs
Accountants need to be sure that their paperwork is also protected - by eliminating static, paper files, the needs of the clients and their companies. By bringing the best to the table, MFT can allow accountants to store and share files - allowing the secure outsourcing and support of client files, without creating additional security needs. This is often crucial when dealing with clients who have their own confidentiality or compliance needs, but across the industry is one of the major reasons an MFT upgrade should be considered.
There are other needs that MFT meets - real-time sharing means that mistakes can be picked up and corrected quicker and that though leeway should always be built into filing on time, that there is no reliance on couriers or postal services.
Accounting in the Business World Today
It is not possible to get a business started and running successfully with less than enough money. If there is not a steady income, there is no way to keep paying out.
Today's businesses are run very much through the use of computer programs and software. Business owners that knew nothing previously can successfully run the financial part of their businesses by using financial programs that have manuals and easy to understand instructions. These are used more for small businesses than large corporations. Human error has been known to cause many problems with finances in the past. Today, computers are more likely to crash than cause an accounting error. Data that is constantly backed up on flash drives or disks is not corrupted by the crashing of one computer or even a network.
Computer programs today help accountants keep track of all the economic data related to their business. They will record, measure, and interpret the data they receive as they work through the accounts receivable and payable. There is software available that allows someone to file and store tax information whether it is for a business or for personal reasons. Businesses often have their own procedures that work well for generating income for their company. They may even come with their own accounting programs and will train a new employee on how it works to keep everything going on the same track.
The files that contain the financial date for a company should always be stored in a safe and secure area in case they are needed in the future for any reason. Sometimes a company will hold the most recent two to five years worth of data in their offices while storing the rest in other areas that are harder to access, especially if the company has been around for a long time. Over the years, businesses that were once keeping track of their finances in ledgers with pen and paper are now using computers, software, disks, and flash drives to store it. They hire data entry specialists to transfer the paper document information into a computer program to be saved more securely for the future. This is always a good idea.
There are many financial institutions that have changed their procedures while others have continued to use the same methods, just updated for the computer age. In order for a business to stay on top, however, their accounting department must be current and up to date on all relevant procedure.
Today's businesses are run very much through the use of computer programs and software. Business owners that knew nothing previously can successfully run the financial part of their businesses by using financial programs that have manuals and easy to understand instructions. These are used more for small businesses than large corporations. Human error has been known to cause many problems with finances in the past. Today, computers are more likely to crash than cause an accounting error. Data that is constantly backed up on flash drives or disks is not corrupted by the crashing of one computer or even a network.
Computer programs today help accountants keep track of all the economic data related to their business. They will record, measure, and interpret the data they receive as they work through the accounts receivable and payable. There is software available that allows someone to file and store tax information whether it is for a business or for personal reasons. Businesses often have their own procedures that work well for generating income for their company. They may even come with their own accounting programs and will train a new employee on how it works to keep everything going on the same track.
The files that contain the financial date for a company should always be stored in a safe and secure area in case they are needed in the future for any reason. Sometimes a company will hold the most recent two to five years worth of data in their offices while storing the rest in other areas that are harder to access, especially if the company has been around for a long time. Over the years, businesses that were once keeping track of their finances in ledgers with pen and paper are now using computers, software, disks, and flash drives to store it. They hire data entry specialists to transfer the paper document information into a computer program to be saved more securely for the future. This is always a good idea.
There are many financial institutions that have changed their procedures while others have continued to use the same methods, just updated for the computer age. In order for a business to stay on top, however, their accounting department must be current and up to date on all relevant procedure.
Payroll Tax Processing Software
Payroll tax software is often used by payroll companies in conjunction with online payroll services, although there are some software used for in-house payroll administration. You will need to manually input information during hiring, but hereafter, payroll calculation and deductions, with the exception of inputting hours worked, are done automatically. Choosing the wrong software can do more harm than good though, so ensure the following.
Features
Most payroll tax software have the same core features - payroll calculation, tax filing, generation of electronic reports, payment delivery information and new-hire reporting. The usual feature for payment delivery options is direct deposit although some advanced software feature check signing and stuffing and payment via a reload-able debit card. HR options include access to government forms and resources, HR news, HR check-ups, and information about HR industry standards. What you need to do is make a list of features you need; and for that, you need to consider the payroll tasks that you will have difficulty carrying out. The most common payroll tasks outsourced are those occurring at the latter part such as tax filing and calculations. Proceed to make a list of "nice-to-haves".
Switch-ability
You should choose payroll and tax administration software which would allow you to integrate input year-to-date payroll information. This way, you wouldn't have to redo things and spend hours entering data for past pay periods. Your software should also be able to expand so you can still use it upon expansion.
Ease of Use
A complicated program will more likely cost you a lot of time and the truth is, people usually change payroll software because whatever it was they were using was too difficult to use. You can avoid getting in the same platform by examining the graphic user interface. That is the part which lets you input information and configure things without getting into the code. You can take a look at product screen shots and examine the lay-out. Lay-out should be intuitive.
Pricing
While it is true that acquiring payroll services and purchasing payroll tax software wasn't as pricey as it used to, it is by no means cheap. Do not be lured by a waived sign-up fee, in case of a payroll tax software bundled with online payroll services. Find out what you will need to pay on average in an entire year instead of the initial fee. Learn about what it would cost to update the software, should there be tax changes or when you use it for multiple businesses.
Features
Most payroll tax software have the same core features - payroll calculation, tax filing, generation of electronic reports, payment delivery information and new-hire reporting. The usual feature for payment delivery options is direct deposit although some advanced software feature check signing and stuffing and payment via a reload-able debit card. HR options include access to government forms and resources, HR news, HR check-ups, and information about HR industry standards. What you need to do is make a list of features you need; and for that, you need to consider the payroll tasks that you will have difficulty carrying out. The most common payroll tasks outsourced are those occurring at the latter part such as tax filing and calculations. Proceed to make a list of "nice-to-haves".
Switch-ability
You should choose payroll and tax administration software which would allow you to integrate input year-to-date payroll information. This way, you wouldn't have to redo things and spend hours entering data for past pay periods. Your software should also be able to expand so you can still use it upon expansion.
Ease of Use
A complicated program will more likely cost you a lot of time and the truth is, people usually change payroll software because whatever it was they were using was too difficult to use. You can avoid getting in the same platform by examining the graphic user interface. That is the part which lets you input information and configure things without getting into the code. You can take a look at product screen shots and examine the lay-out. Lay-out should be intuitive.
Pricing
While it is true that acquiring payroll services and purchasing payroll tax software wasn't as pricey as it used to, it is by no means cheap. Do not be lured by a waived sign-up fee, in case of a payroll tax software bundled with online payroll services. Find out what you will need to pay on average in an entire year instead of the initial fee. Learn about what it would cost to update the software, should there be tax changes or when you use it for multiple businesses.
The Importance of a Business Accountant
Business Accountant
Business accountants are a critical component to any small business. But it is just as critical to find a great business account because just having one isn't enough. An accountant is no longer just a number cruncher. They are financial advisers and planners as well and they can point you in the right direction to properly manage and maximize your company's money. They document exactly where the company's money goes and they are up to date on current tax laws and can help a business save money where it might be losing money without an accountant. Because accountants are in charge of company finances it is critically important that you find an accountant with integrity, that is honest, and that can be trusted.
Certified Public Accountants
To become a Certified Public Accountant (CPA) an accountant must pass certain qualifications. CPA's require a certain level of schooling as well as experience. They also need to pass rigorous testing to prove their competence. In addition they must continue their education so that they are informed on all the newest tax laws. Because of these things a CPA is a much more knowledgeable and informed accountant. When starting out small businesses generally need a CPA to make sure that they aren't losing money where they shouldn't be and to keep their finances in very good order. There are many laws that a CPA will know about that a general accountant just won't know because they haven't had the schooling. CPA's are more expensive, but if you hire one that is trustworthy your accountant will tell you when you are paying them too much for services that could be handled by a general accountant.
What Does an Accountant Handle?
Accountants do a variety of tasks for small businesses. They should be involved in the start up process of any new business. They can help with planning, negotiating leases, and setting up book-keeping systems. As soon as a business is up and running an accountant prepares tax returns, annual information returns, quarterly reviews, and can offer financial advice. An accountant will set up efficient and organized book-keeping systems to make sure that any information needed can be found easily. An accountant can take care of business taxes as well as helping with personal tax planning. A lot of the time personal taxes are intertwined with business taxes and having an accountant will help to manage money more effectively. Accountants also provide a business an opportunity to network and receive referrals that it would not otherwise receive. Accounts have many different customers and they can let those clients know when beneficial opportunities arise. They may bring in new customers to a business they work for, or they might be able to facilitate new business partnerships that a business wouldn't get without them.
Accountants are highly valuable in the business world. If you are a small business you need a business accountant or a small business consultant to make sure that you aren't wasting money when you could be saving it. A business accountant knows tax laws and can make sure that you pay what is necessary and don't pay what you shouldn't be paying. The value of having a small business accountant can not be overstated. They are critical to financial planning for a small business and handling business taxes, which are governed by complicated rules. A business accountant can make or break a business, especially if it's just starting out. You need to make sure that you have an accountant that is knowledgeable and that you can trust.
Business accountants are a critical component to any small business. But it is just as critical to find a great business account because just having one isn't enough. An accountant is no longer just a number cruncher. They are financial advisers and planners as well and they can point you in the right direction to properly manage and maximize your company's money. They document exactly where the company's money goes and they are up to date on current tax laws and can help a business save money where it might be losing money without an accountant. Because accountants are in charge of company finances it is critically important that you find an accountant with integrity, that is honest, and that can be trusted.
Certified Public Accountants
To become a Certified Public Accountant (CPA) an accountant must pass certain qualifications. CPA's require a certain level of schooling as well as experience. They also need to pass rigorous testing to prove their competence. In addition they must continue their education so that they are informed on all the newest tax laws. Because of these things a CPA is a much more knowledgeable and informed accountant. When starting out small businesses generally need a CPA to make sure that they aren't losing money where they shouldn't be and to keep their finances in very good order. There are many laws that a CPA will know about that a general accountant just won't know because they haven't had the schooling. CPA's are more expensive, but if you hire one that is trustworthy your accountant will tell you when you are paying them too much for services that could be handled by a general accountant.
What Does an Accountant Handle?
Accountants do a variety of tasks for small businesses. They should be involved in the start up process of any new business. They can help with planning, negotiating leases, and setting up book-keeping systems. As soon as a business is up and running an accountant prepares tax returns, annual information returns, quarterly reviews, and can offer financial advice. An accountant will set up efficient and organized book-keeping systems to make sure that any information needed can be found easily. An accountant can take care of business taxes as well as helping with personal tax planning. A lot of the time personal taxes are intertwined with business taxes and having an accountant will help to manage money more effectively. Accountants also provide a business an opportunity to network and receive referrals that it would not otherwise receive. Accounts have many different customers and they can let those clients know when beneficial opportunities arise. They may bring in new customers to a business they work for, or they might be able to facilitate new business partnerships that a business wouldn't get without them.
Accountants are highly valuable in the business world. If you are a small business you need a business accountant or a small business consultant to make sure that you aren't wasting money when you could be saving it. A business accountant knows tax laws and can make sure that you pay what is necessary and don't pay what you shouldn't be paying. The value of having a small business accountant can not be overstated. They are critical to financial planning for a small business and handling business taxes, which are governed by complicated rules. A business accountant can make or break a business, especially if it's just starting out. You need to make sure that you have an accountant that is knowledgeable and that you can trust.
What Makes a Good CPA?
As tax time comes to a close, I find myself once again thinking "phew, I'm glad that's over." It's also around this time of year when I think about how tedious tax preparation can be. If my lifestyle were any simpler then I suppose my tax preparation would be as well. Understanding all the various aspects of the tax code may truly be an act of futility. For that reason praise must be given to the men and women who have chosen a career replete with number crunching and studying tax preparation. These people are the accountants of the world.
Since I find it such a chore to prepare my own taxes I look to accountants for aid. Therefore, one may ask the question, "what makes an accountant worthy to toil through all of my receipts, W-2's, 1099's and various other itemized deductions?" To help answer that, I have come up with several attributes that I look for when trying to choose a good accountant.
Without a doubt one of the best attributes is knowledge of the tax laws. A well educated accountant is invaluable to the tax payer. Some people who have prepared taxes for individuals or businesses make claims about their experience in dealing with the IRS. No matter what their experience may be, many of them are not Certified Public Accountants. For me having the 3 letters "CPA" included on the tax preparers title brings comfort my mind because it shows at least that my tax preparer has been trained. Those 3 letters also imply accuracy and dedication.
Along with knowledge of the well trained CPA, a good quality for an accountant is punctuality of services. I understand that the client needs to present his/her tax documents in a timely manner so the preparer can meet specified deadlines. However, professionalism by staying ahead of the game and filing extensions when deemed appropriate are valuable weapons that I like to see in the CPA's arsenal.
Since there is a lot of responsibility placed on the client as well for accuracy when filling out tax documents, there are times when the client needs advice or coaching. Therefore, another great attribute of the CPA is availability. There have been countless times when looking at my tax paperwork confusion over certain things creates consternation. Being able to get a hold of any accountant knowledgeable of my circumstances may be a daunting task especially when dealing with a large accounting firm.
After reaching my accountant and relaying my concerns, the next attribute of importance is communication. As much as I admire professionals and the knowledge they possess in their area of expertise, sometimes they forget that not everyone understands their vernacular. Some questions are answered using verbiage that can leave you more confused than before you posed the question. Speaking plainly to the client about concerns can oftentimes be very refreshing.
In conclusion, the afore mentioned characteristics of accountants I feel are very important: Knowledge, Availability and Communication. With these qualities, the accountant can make their client feel less troubled by fear of institutional reprisals or reproach.
Since I find it such a chore to prepare my own taxes I look to accountants for aid. Therefore, one may ask the question, "what makes an accountant worthy to toil through all of my receipts, W-2's, 1099's and various other itemized deductions?" To help answer that, I have come up with several attributes that I look for when trying to choose a good accountant.
Without a doubt one of the best attributes is knowledge of the tax laws. A well educated accountant is invaluable to the tax payer. Some people who have prepared taxes for individuals or businesses make claims about their experience in dealing with the IRS. No matter what their experience may be, many of them are not Certified Public Accountants. For me having the 3 letters "CPA" included on the tax preparers title brings comfort my mind because it shows at least that my tax preparer has been trained. Those 3 letters also imply accuracy and dedication.
Along with knowledge of the well trained CPA, a good quality for an accountant is punctuality of services. I understand that the client needs to present his/her tax documents in a timely manner so the preparer can meet specified deadlines. However, professionalism by staying ahead of the game and filing extensions when deemed appropriate are valuable weapons that I like to see in the CPA's arsenal.
Since there is a lot of responsibility placed on the client as well for accuracy when filling out tax documents, there are times when the client needs advice or coaching. Therefore, another great attribute of the CPA is availability. There have been countless times when looking at my tax paperwork confusion over certain things creates consternation. Being able to get a hold of any accountant knowledgeable of my circumstances may be a daunting task especially when dealing with a large accounting firm.
After reaching my accountant and relaying my concerns, the next attribute of importance is communication. As much as I admire professionals and the knowledge they possess in their area of expertise, sometimes they forget that not everyone understands their vernacular. Some questions are answered using verbiage that can leave you more confused than before you posed the question. Speaking plainly to the client about concerns can oftentimes be very refreshing.
In conclusion, the afore mentioned characteristics of accountants I feel are very important: Knowledge, Availability and Communication. With these qualities, the accountant can make their client feel less troubled by fear of institutional reprisals or reproach.
Organizing an Accounting Department - Basics
Many growing for profit and nonprofit organizations find themselves with financial reports that make no sense, "forgotten" revenues and slow bill paying processes. They may be at a point where the part-time bookkeeper is over his or her head and flooded in work. So, what can you do? You can look at accounting tasks and divide the work within these tasks. For example, a typical accounting department performs the following work:
A mistake common in growing small businesses is to assume that accounting is easy and can be done by the person who is a receptionist or works in another part of the business. Without training or education, this person should be able to perform accounting functions of a full-charge bookkeeper. That's a mistake and is not fair. Hire accounting people who have the proper education and experience. Accounting managers or controllers should have at least a bachelors' degree in accounting. Someone with a four-year degree in business, and a few years of accounting experience may also qualify.
As you organize the department, consider segregation of duties. For example, the person that opens the mail or receives money is NOT the person who books revenues in the accounting system. If the person running accounts payable is also doing bank reconciliations, then a manager or controller should review the reconciliation and look at cashed checks.
Before hiring anybody for accounting positions, run a background check on all individuals, who should be trustworthy with a clean credit history. Of course, exceptions can be made, but they are usually rare occasions.
Many businesses organize their accounting department using flowcharts and job descriptions. You don't want to have the same task be performed twice or three times and at the same time, you don't want to miss an important process. Some firms hire outside consultants to help them in organizing their department for maximum efficiency, while considering risks and controls. Unfortunately, this last option is usually used after a fraud or loss situation, when people are traumatized and willing to pay for professional advice.
When considering a new accounting department, you have a few options and what works for one business may not work for another. You could organize the department yourself and then ask for an outside CPA or management firm to review your set up for internal control and efficiencies.
- Pay bills - Accounts Payable
- Recognize revenues - Accounts Receivable
- Process payroll - Payroll Administrator
A mistake common in growing small businesses is to assume that accounting is easy and can be done by the person who is a receptionist or works in another part of the business. Without training or education, this person should be able to perform accounting functions of a full-charge bookkeeper. That's a mistake and is not fair. Hire accounting people who have the proper education and experience. Accounting managers or controllers should have at least a bachelors' degree in accounting. Someone with a four-year degree in business, and a few years of accounting experience may also qualify.
As you organize the department, consider segregation of duties. For example, the person that opens the mail or receives money is NOT the person who books revenues in the accounting system. If the person running accounts payable is also doing bank reconciliations, then a manager or controller should review the reconciliation and look at cashed checks.
Before hiring anybody for accounting positions, run a background check on all individuals, who should be trustworthy with a clean credit history. Of course, exceptions can be made, but they are usually rare occasions.
Many businesses organize their accounting department using flowcharts and job descriptions. You don't want to have the same task be performed twice or three times and at the same time, you don't want to miss an important process. Some firms hire outside consultants to help them in organizing their department for maximum efficiency, while considering risks and controls. Unfortunately, this last option is usually used after a fraud or loss situation, when people are traumatized and willing to pay for professional advice.
When considering a new accounting department, you have a few options and what works for one business may not work for another. You could organize the department yourself and then ask for an outside CPA or management firm to review your set up for internal control and efficiencies.
The Importance of Good Bookkeeping in Business
The announcement in January by HMRC that they intended to crack down on poor record keeping by SMEs was a wake up call to all businesses. The original proposal, which went out to consultation, involved the proposed investigation of up to 50,000 SMEs each year.
The consultation period finished on 23 February and we are still waiting for the final scheme details. However, many industry bodies have condemned the proposals. The Institute of Chartered Accountants of Scotland has calculated that the cost to an SME of a half day review will be in the region of £560, far more than the £54 envisaged by HMRC. In addition, whilst a sample check by HMRC revealed poor record keeping in around 40% of cases, experts disagree with the revenue assumption that in many cases the poor record keeping was either deliberate or would lead to underpayment of tax.
With potential fines of £3,000 for poor record keeping, businesses are urged to tighten up on record keeping as a way of pre-empting the Revenue. The best way of doing this is to employ the services of a good bookkeeper or at the very least a good bookkeeping programme.
When deciding what sort of bookkeeping system to set up, the first port of call should be your accountant. It is in their interest to help you to set up a system that is right for your business, particularly as this will help them to prepare your end of year accounts speedily and without error. You may well find that your accountant includes bookkeeping or offers free bookkeeping software as part of their standard package. Alternatively, they might offer a part time bookkeeping service or be able to recommend a bookkeeper for you.
Bookkeeping is not just about avoiding potential HMRC fines. Keeping up to date with receipts and payments will help you to stay on top of your businesses finances. VAT returns will be more accurate and by using appropriate accounting software can often be produced automatically at the touch of a button. In addition, by keeping on top of finances you will be able to quickly spot outstanding invoices and chase slow payers before they get away.
Improving record keeping also means keeping track of paperwork. Your accountant will be able to work with you to help to set up systems for dealing with paperwork and information. You may well find that by reviewing your procedures you can not only improve record filing but also simplify processes and save costs. Companies such as keebo.com and receipt-bank.com offer service that will take away the meticulous job of processing and keeping track of receipts and invoices by scanning, sorting and making it available electronically.
Whilst the crackdown on poor paperwork by HMRC is driven by their desire to collect all taxes owed they may in the long run be doing SMEs a great favour. With better record keeping leading to greater business efficiency businesses will be more on top of their finances. This in turn can lead to a reduced need for reliance on borrowing as well as a reduction in charges from accountants at the end of the financial year. Leaner and fitter businesses which are on top of their records and finances will be the winners and well set for taking every advantage of the upturn in the economy.
The consultation period finished on 23 February and we are still waiting for the final scheme details. However, many industry bodies have condemned the proposals. The Institute of Chartered Accountants of Scotland has calculated that the cost to an SME of a half day review will be in the region of £560, far more than the £54 envisaged by HMRC. In addition, whilst a sample check by HMRC revealed poor record keeping in around 40% of cases, experts disagree with the revenue assumption that in many cases the poor record keeping was either deliberate or would lead to underpayment of tax.
With potential fines of £3,000 for poor record keeping, businesses are urged to tighten up on record keeping as a way of pre-empting the Revenue. The best way of doing this is to employ the services of a good bookkeeper or at the very least a good bookkeeping programme.
When deciding what sort of bookkeeping system to set up, the first port of call should be your accountant. It is in their interest to help you to set up a system that is right for your business, particularly as this will help them to prepare your end of year accounts speedily and without error. You may well find that your accountant includes bookkeeping or offers free bookkeeping software as part of their standard package. Alternatively, they might offer a part time bookkeeping service or be able to recommend a bookkeeper for you.
Bookkeeping is not just about avoiding potential HMRC fines. Keeping up to date with receipts and payments will help you to stay on top of your businesses finances. VAT returns will be more accurate and by using appropriate accounting software can often be produced automatically at the touch of a button. In addition, by keeping on top of finances you will be able to quickly spot outstanding invoices and chase slow payers before they get away.
Improving record keeping also means keeping track of paperwork. Your accountant will be able to work with you to help to set up systems for dealing with paperwork and information. You may well find that by reviewing your procedures you can not only improve record filing but also simplify processes and save costs. Companies such as keebo.com and receipt-bank.com offer service that will take away the meticulous job of processing and keeping track of receipts and invoices by scanning, sorting and making it available electronically.
Whilst the crackdown on poor paperwork by HMRC is driven by their desire to collect all taxes owed they may in the long run be doing SMEs a great favour. With better record keeping leading to greater business efficiency businesses will be more on top of their finances. This in turn can lead to a reduced need for reliance on borrowing as well as a reduction in charges from accountants at the end of the financial year. Leaner and fitter businesses which are on top of their records and finances will be the winners and well set for taking every advantage of the upturn in the economy.
Advancements Within The Field Of Accounting
When considering a degree and career in accounting, many think of long days spent at a desk, scribbling numbers in various notebooks. You may be surprised to know that the fields of accounting and auditing are now much more technical in nature. The paper notebooks have been replaced by databases and information systems, and the types of careers available to those with an accounting degree have grown substantially.
The advent of these more high-tech methods of storing financial information means that accountants and auditors must also be trained to not only work within these types of systems, but may be called upon to help design and build them. A degree in accounting can help prepare you for these new types of challenges and opportunities.
Software and system designers may be adept at designing computers and computer systems, but they often have little to no knowledge of accounting. In these cases, accounting degree holders are often the key to providing the necessary insight to assist designers in creating systems that meet the needs of the accounting world.
Working with information technology firms is not the only new horizon in the accounting and auditing fields, either. With a degree in accounting, graduates also qualify for a career with the Federal Bureau of Investigation, where they may assist in investigating "white-collar" crimes, such as money laundering.
The field of auditing, which a degree in accounting can also prepare you for a career in, shows rapid growth and higher pay, according to the Bureau of Labor Statistics. Auditors help to ensure that financial statements of companies are free of errors and can help safeguard companies against such illegal activities as fraud.
Another appealing aspect of public accounting is that the actual work may be done from virtually anywhere. With an average annual salary of nearly $70,000, these professionals may choose to work from home, or even while traveling to remote locations. Once the initial face-to-face meetings and groundwork with their clients has been established, they simply need to be able to receive and transmit the necessary information to perform their duties, which can be done from almost any location these days.
Offering even a wider variety of career choices, as well as even higher salaries, becoming a certified public accountant is a very attractive option to many degree holders in the field. Becoming a CPA requires passing a four-part exam, as well as many other prerequisites, but it also opens additional opportunities to those who choose to do so. The added flexibility in career choices and availability of higher salaries makes the additional CPA requirements well worth it to many of these degree holders.
The advent of these more high-tech methods of storing financial information means that accountants and auditors must also be trained to not only work within these types of systems, but may be called upon to help design and build them. A degree in accounting can help prepare you for these new types of challenges and opportunities.
Software and system designers may be adept at designing computers and computer systems, but they often have little to no knowledge of accounting. In these cases, accounting degree holders are often the key to providing the necessary insight to assist designers in creating systems that meet the needs of the accounting world.
Working with information technology firms is not the only new horizon in the accounting and auditing fields, either. With a degree in accounting, graduates also qualify for a career with the Federal Bureau of Investigation, where they may assist in investigating "white-collar" crimes, such as money laundering.
The field of auditing, which a degree in accounting can also prepare you for a career in, shows rapid growth and higher pay, according to the Bureau of Labor Statistics. Auditors help to ensure that financial statements of companies are free of errors and can help safeguard companies against such illegal activities as fraud.
Another appealing aspect of public accounting is that the actual work may be done from virtually anywhere. With an average annual salary of nearly $70,000, these professionals may choose to work from home, or even while traveling to remote locations. Once the initial face-to-face meetings and groundwork with their clients has been established, they simply need to be able to receive and transmit the necessary information to perform their duties, which can be done from almost any location these days.
Offering even a wider variety of career choices, as well as even higher salaries, becoming a certified public accountant is a very attractive option to many degree holders in the field. Becoming a CPA requires passing a four-part exam, as well as many other prerequisites, but it also opens additional opportunities to those who choose to do so. The added flexibility in career choices and availability of higher salaries makes the additional CPA requirements well worth it to many of these degree holders.
Things to Know About Business Accounting
Of course, today the "books" are on computer programs and software. Very few accountants still take care of business finances by using paper and pen. It is not as safe and human error can cause more problems than a computer malfunction. When it comes to things like finances and numbers, a computer will generally do a better job than a regular person with some accounting training. Many organizations will use their accountants to take care of all financial reports, taxes, analyses, and projects for the future of the company.
Accountants will use computer programs and software to help them work with economic data, recording, measuring, and interpreting figures from the documents of the company. They will prepare all of the tax forms and financial statements that are related to the customers' accounts according to the system that the company has in place. Without the proper accounting measures in place, productivity suffers and the company could fail completely. They are crucial to the financial success of any company.
Financial files will contain the financial data and this information will be held for many years as the company usually keeps records for an extended period. Some will keep them for many years, while others will put a cap on their old files of about two to three years, while archiving the rest for retrieval only under special circumstances, such as an audit.
An experienced accountant will be able to catch many flaws and faults in a system that is in place. They will be able to fix problems that inexperienced accountants may have made that caused some problems in the company. Some people simply have a natural talent for seeing the numbers and calculating them in their head. It is harder for others. Either way, when someone determines that this is the career they want to do and they put in the time and effort to learning all they can about it, they may begin to find new ways of doing things to make it even easier. There is a great deal of variability in the way finances can be controlled.
Some financial institutions, like banks, have ways of handling their funds that are unlike other similar businesses. When there are changes of accounting and finance rules, businesses should always stay on top and current. Computer software is updated every couple of years. The accounting field is always making necessary adjustments to keep up with the fluctuations in the laws and taxes.
Accountants will use computer programs and software to help them work with economic data, recording, measuring, and interpreting figures from the documents of the company. They will prepare all of the tax forms and financial statements that are related to the customers' accounts according to the system that the company has in place. Without the proper accounting measures in place, productivity suffers and the company could fail completely. They are crucial to the financial success of any company.
Financial files will contain the financial data and this information will be held for many years as the company usually keeps records for an extended period. Some will keep them for many years, while others will put a cap on their old files of about two to three years, while archiving the rest for retrieval only under special circumstances, such as an audit.
An experienced accountant will be able to catch many flaws and faults in a system that is in place. They will be able to fix problems that inexperienced accountants may have made that caused some problems in the company. Some people simply have a natural talent for seeing the numbers and calculating them in their head. It is harder for others. Either way, when someone determines that this is the career they want to do and they put in the time and effort to learning all they can about it, they may begin to find new ways of doing things to make it even easier. There is a great deal of variability in the way finances can be controlled.
Some financial institutions, like banks, have ways of handling their funds that are unlike other similar businesses. When there are changes of accounting and finance rules, businesses should always stay on top and current. Computer software is updated every couple of years. The accounting field is always making necessary adjustments to keep up with the fluctuations in the laws and taxes.
IFRS and GAAP: The Similarities and Differences
It is only a matter of time before the accounting profession is completely converged into one set of high-quality international standards. Over a decade now, there has been advancements in converging the U.S. generally accepted accounting principles with the International Financial Reporting Standards. As the two accounting standards continue to converge into a single set of international standards, one will realize that there are many similarities and differences between the methods. Although the differences may provoke a need for compromise, the similarities reveal that the convergence is an attainable goal.
Generally accepted accounting principles, or GAAP, are the common set of accounting standards in the U.S. GAAP, issued by the American Institute of Certified Public Accountants (AICPA), has been an ongoing development for the past 60 years; it includes the following items: Financial Accounting Standards Board (FASB) Standards, Interpretations, and Staff Positions; Accounting Principles Board (APB) Opinions; and AICPA Research Bulletins. Today, the Securities and Exchange Commission (SEC) oversees all U.S. accounting practices, making sure the accounting practices adhere to GAAP standards. GAAP establishes standards to make financial records relevant and reliable for all interested investors, stockholders, or other financial readers. So what about international companies? How do these companies develop financial information? International companies cannot just prepare their financial information under GAAP standards; they have to take the International Financial Standards rules into consideration as well.
The International Accounting Standards Board (IASB) in London developed the International Financial Reporting Standards (IFRS or iGAAP). Today, the European Union requires all companies in Europe to follow accounting practices under the IFRS method. Over 100 countries currently use IFRS. When the U.S. completely adopts IFRS, it will be easier to compare U.S. companies to foreign companies, and would therefore allow U.S. companies to raise capital in foreign markets.
GAAP and IFRS are alike in many ways, thus making the convergence a realizable task. The conceptual frameworks of both methods are very similar in structure, referring to their accounting objectives, elements, and qualitative characteristics. A major similarity between GAAP and IFRS is that both standards use an income statement, a balance sheet, and a statement of cash flows. When dealing with cash and cash equivalents, both methods are essentially the same. Another major similarity is that both GAAP and IFRS prepare financial statements on an accrued basis; meaning revenue is recognized when it is realized or realizable. There are many other similarities between GAAP and IFRS, and will therefore help in a complete convergence in the near future, but before there is one international financial accounting set of standards, the differences between GAAP and IFRS have to be taken into consideration.
One major difference between accounting practices in GAAP and IFRS is that GAAP is rule-based while IFRS is principle-based. Principle-based accounting allows for different interpretation of the same transactions, where rule-based GAAP follows a set of rules in preparing financial statements - this means there is no room for error. In other words, GAAP standards are extremely strict in accounting practices and disclosure requirements, whereas IFRS practices are less restrictive; for example, the GAAP method is stricter when preparing income statements, where it requires use of a single-step or multiple step approach - IFRS does not mention either approach. In addition to the multiple-step income statement in GAAP, unusual and infrequent items must be included as extraordinary items - extraordinary items are prohibited in IFRS. There is also a major difference between the two methods in relation to the LIFO (last in first out) cost flow assumption. Only GAAP accepts the LIFO method for inventory valuation, whereas IFRS can only use average cost and FIFO (first in first out) for inventory valuation. The differences between the two methods need to be resolved to benefit economic globalization.
The different methods can be problematic to potential investors in international markets, because it will be difficult to interpret and understand financial information. It will be financially beneficial for the global economy when the accounting standards are merged into one set of rules. The FASB and IASB have issued a memorandum of understanding where they are to make the existing financial standards compatible, and once ensured, they intend on keeping compatibility. In efforts to converge, FASB has issued a rule that permits a fair value option for financial instruments. In 2009 the SEC allowed some U.S. companies to use IFRS, with plans on a full convergence by 2016.
Generally accepted accounting principles, or GAAP, are the common set of accounting standards in the U.S. GAAP, issued by the American Institute of Certified Public Accountants (AICPA), has been an ongoing development for the past 60 years; it includes the following items: Financial Accounting Standards Board (FASB) Standards, Interpretations, and Staff Positions; Accounting Principles Board (APB) Opinions; and AICPA Research Bulletins. Today, the Securities and Exchange Commission (SEC) oversees all U.S. accounting practices, making sure the accounting practices adhere to GAAP standards. GAAP establishes standards to make financial records relevant and reliable for all interested investors, stockholders, or other financial readers. So what about international companies? How do these companies develop financial information? International companies cannot just prepare their financial information under GAAP standards; they have to take the International Financial Standards rules into consideration as well.
The International Accounting Standards Board (IASB) in London developed the International Financial Reporting Standards (IFRS or iGAAP). Today, the European Union requires all companies in Europe to follow accounting practices under the IFRS method. Over 100 countries currently use IFRS. When the U.S. completely adopts IFRS, it will be easier to compare U.S. companies to foreign companies, and would therefore allow U.S. companies to raise capital in foreign markets.
GAAP and IFRS are alike in many ways, thus making the convergence a realizable task. The conceptual frameworks of both methods are very similar in structure, referring to their accounting objectives, elements, and qualitative characteristics. A major similarity between GAAP and IFRS is that both standards use an income statement, a balance sheet, and a statement of cash flows. When dealing with cash and cash equivalents, both methods are essentially the same. Another major similarity is that both GAAP and IFRS prepare financial statements on an accrued basis; meaning revenue is recognized when it is realized or realizable. There are many other similarities between GAAP and IFRS, and will therefore help in a complete convergence in the near future, but before there is one international financial accounting set of standards, the differences between GAAP and IFRS have to be taken into consideration.
One major difference between accounting practices in GAAP and IFRS is that GAAP is rule-based while IFRS is principle-based. Principle-based accounting allows for different interpretation of the same transactions, where rule-based GAAP follows a set of rules in preparing financial statements - this means there is no room for error. In other words, GAAP standards are extremely strict in accounting practices and disclosure requirements, whereas IFRS practices are less restrictive; for example, the GAAP method is stricter when preparing income statements, where it requires use of a single-step or multiple step approach - IFRS does not mention either approach. In addition to the multiple-step income statement in GAAP, unusual and infrequent items must be included as extraordinary items - extraordinary items are prohibited in IFRS. There is also a major difference between the two methods in relation to the LIFO (last in first out) cost flow assumption. Only GAAP accepts the LIFO method for inventory valuation, whereas IFRS can only use average cost and FIFO (first in first out) for inventory valuation. The differences between the two methods need to be resolved to benefit economic globalization.
The different methods can be problematic to potential investors in international markets, because it will be difficult to interpret and understand financial information. It will be financially beneficial for the global economy when the accounting standards are merged into one set of rules. The FASB and IASB have issued a memorandum of understanding where they are to make the existing financial standards compatible, and once ensured, they intend on keeping compatibility. In efforts to converge, FASB has issued a rule that permits a fair value option for financial instruments. In 2009 the SEC allowed some U.S. companies to use IFRS, with plans on a full convergence by 2016.
One Size Does Not Fit All!
In the world of credit card processing and merchant services, rates are not a one size fits all. I know when dealing with merchants the first thing they want to know is "What is your rate?" I never answer that question without asking questions first, such as "Who and what type of customers do you have? Are they consumers or business to business? How do you process your credit cards? Do you have a credit card terminal or are you running them online? Do you swipe or key your transactions? All of these questions are factors on determining the right rates for your account.
I am going to break this down as basic as I can. First, understand that Visa, Mastercard and Discover have rate categories (aka Interchange) for every type of credit card. These rates are assessed to the merchant. There are approximately 600 interchange rates!
There are two ways to price merchants, Interchange (aka Passthru) and Tiered Pricing. Interchange is the actual costs from Visa, Mastercard and Discover. The other is Tiered Pricing.
Interchange plus basis points offers the merchant true costs from Visa, Mastercard and Discover. The basis points are the above costs that go back to the company you are doing business with. Basis points are set by the agent, which are typically between.15 to.20% (but can be lower or higher). No, this is not what your agent makes off of your account but that is a different article, just in case you were wondering.
To give you an example of Interchange, the cost of a Mastercard debit card (like your personal debit card from your bank) is 1.16%. So an agent using Interchange plus basis points would come back with something like this: 1.16% +.20% (20 basis points). So the total cost for this card, to the merchant, would be 1.36%.
Tiered Pricing is the most common and it can be very deceptive! How many of you have received a phone call stating a low 1.59% or something similar? Well I will be honest with you, there is a good possibility you will NEVER see that rate. Yes I said NEVER.
For Tiered Pricing it is a bit different. All of those interchange rates mentioned have to be distributed between three tiers:
The first tier is a Qualified rate. They are your basic credit cards that are swiped face to face. This is the rate that is typically disclosed. I have seen rates quoted from 1.49% (which is below cost) to 1.80%. For our examples we will use 1.70%.
The second tier is the Mid Qualified rate. A large portion of credit cards fall into this category if your customer is using rewards/sky mile cards (very popular) or if the sale is keyed rather than swiped. This tier is assessed a downgrade fee (aka surcharge). Agents don't typically disclose this rate. You need to ask for it. They will either tell you the full rate or they will only tell you the downgrade fee. If they tell you the downgrade fee is.50% you must add that rate to your Qualified rate (1.70% +.50 =2.20%). A Mid Qualified rate can be anywhere from 1.99% to 2.30%.
The third tier is the Non Qualified rate. Your cost of taking cards in this tier is from business cards, corporate cards, address or zip code provided doesn't match the card holder's on file, certain cards that are keyed into a terminal, international cards, etc. Again, this tier is assessed a downgrade fee that agents typically don't disclose. You will need to ask for it. If they tell you the downgrade fee is 1.50% you must add that to your Qualified rate (1.70 + 1.50 = 3.20%). A Non Qualified rate can be anywhere from 2.94% to over 4%.
This is where deceptive practices come into play. Every agent is willing to tell you that best rate. Notice I didn't say best Qualified rate! They don't disclose everything! Their best rate might be a rate you will never see? Are they telling you what the downgrade fees are? Technically they aren't lying; they just aren't DISCLOSING all the fees to you.
Interchange plus basis points vs. tiered pricing
Let's break down a few different types of credit cards. From the example above, for the Mastercard debit card, we know the cost plus basis points is 1.36%. That card would be considered a Qualified card on a Tiered plan. So if we use the example rate for the Qualified tier above it would be 1.70%.
I'll show you two more (even though there are almost 600!) This time I'll use a Visa Card Not Present (typical consumer bank credit card keyed in). The interchange cost is 1.89% +.20% (plus basis points) =2.09%
Using the Tiered pricing this credit card would be a mid-qualified card so the downgrade fee will apply. Using the example pricing for our qualified rate 1.70% and the example downgrade fee.50% the mid qualified rate would be (1.70%+.50%) =2.20%
Visa CPS/Retail Credit (typical consumer bank credit card, swiped face to face). The Interchange cost is 1.63% +.20% (plus basis points) =1.83%.
Using the Tiered pricing credit card would be a Qualified card so no downgrade fee will apply. Using the example pricing for our qualified rate the rate would be 1.70%. In this case, if you took these types of cards a tiered pricing plan might be better.
These are just three examples. You can see the rate differences between the two pricing plans. It's all how the agent prices your merchant account. These are just the basics that come into play. That is why rates are not "one size fits all".
If you are a hair dresser or coffee shop you might take more debit cards or retail cards. However, if you are keying all your transactions or taking business/corporate cards, because you are a business to business merchant, then your needs are completely different. That is why an agent asks for a statement. To see what kind of cards you're taking and fees you're paying to price you properly or in some cases to take advantage of you!
So how do you know if you're saving money? If you're an Interchange merchant than you can see the difference in the basis points; you know what's lower than what you currently have. If you are on tiered plan make the agent disclose all three tiered rates (don't forget you might have to do the downgrade math). You can tell what rates are lower when you have everything disclosed.
There are other costs involved such as transaction fees, monthly fees, batching fees, annual fees, and other assorted fees that can have an impact on the costs. But if you don't have the right information or understand the basics between Interchange and Tiered pricing then you never stood a chance in the first place to make the right decision!
I am going to break this down as basic as I can. First, understand that Visa, Mastercard and Discover have rate categories (aka Interchange) for every type of credit card. These rates are assessed to the merchant. There are approximately 600 interchange rates!
There are two ways to price merchants, Interchange (aka Passthru) and Tiered Pricing. Interchange is the actual costs from Visa, Mastercard and Discover. The other is Tiered Pricing.
Interchange plus basis points offers the merchant true costs from Visa, Mastercard and Discover. The basis points are the above costs that go back to the company you are doing business with. Basis points are set by the agent, which are typically between.15 to.20% (but can be lower or higher). No, this is not what your agent makes off of your account but that is a different article, just in case you were wondering.
To give you an example of Interchange, the cost of a Mastercard debit card (like your personal debit card from your bank) is 1.16%. So an agent using Interchange plus basis points would come back with something like this: 1.16% +.20% (20 basis points). So the total cost for this card, to the merchant, would be 1.36%.
Tiered Pricing is the most common and it can be very deceptive! How many of you have received a phone call stating a low 1.59% or something similar? Well I will be honest with you, there is a good possibility you will NEVER see that rate. Yes I said NEVER.
For Tiered Pricing it is a bit different. All of those interchange rates mentioned have to be distributed between three tiers:
The first tier is a Qualified rate. They are your basic credit cards that are swiped face to face. This is the rate that is typically disclosed. I have seen rates quoted from 1.49% (which is below cost) to 1.80%. For our examples we will use 1.70%.
The second tier is the Mid Qualified rate. A large portion of credit cards fall into this category if your customer is using rewards/sky mile cards (very popular) or if the sale is keyed rather than swiped. This tier is assessed a downgrade fee (aka surcharge). Agents don't typically disclose this rate. You need to ask for it. They will either tell you the full rate or they will only tell you the downgrade fee. If they tell you the downgrade fee is.50% you must add that rate to your Qualified rate (1.70% +.50 =2.20%). A Mid Qualified rate can be anywhere from 1.99% to 2.30%.
The third tier is the Non Qualified rate. Your cost of taking cards in this tier is from business cards, corporate cards, address or zip code provided doesn't match the card holder's on file, certain cards that are keyed into a terminal, international cards, etc. Again, this tier is assessed a downgrade fee that agents typically don't disclose. You will need to ask for it. If they tell you the downgrade fee is 1.50% you must add that to your Qualified rate (1.70 + 1.50 = 3.20%). A Non Qualified rate can be anywhere from 2.94% to over 4%.
This is where deceptive practices come into play. Every agent is willing to tell you that best rate. Notice I didn't say best Qualified rate! They don't disclose everything! Their best rate might be a rate you will never see? Are they telling you what the downgrade fees are? Technically they aren't lying; they just aren't DISCLOSING all the fees to you.
Interchange plus basis points vs. tiered pricing
Let's break down a few different types of credit cards. From the example above, for the Mastercard debit card, we know the cost plus basis points is 1.36%. That card would be considered a Qualified card on a Tiered plan. So if we use the example rate for the Qualified tier above it would be 1.70%.
I'll show you two more (even though there are almost 600!) This time I'll use a Visa Card Not Present (typical consumer bank credit card keyed in). The interchange cost is 1.89% +.20% (plus basis points) =2.09%
Using the Tiered pricing this credit card would be a mid-qualified card so the downgrade fee will apply. Using the example pricing for our qualified rate 1.70% and the example downgrade fee.50% the mid qualified rate would be (1.70%+.50%) =2.20%
Visa CPS/Retail Credit (typical consumer bank credit card, swiped face to face). The Interchange cost is 1.63% +.20% (plus basis points) =1.83%.
Using the Tiered pricing credit card would be a Qualified card so no downgrade fee will apply. Using the example pricing for our qualified rate the rate would be 1.70%. In this case, if you took these types of cards a tiered pricing plan might be better.
These are just three examples. You can see the rate differences between the two pricing plans. It's all how the agent prices your merchant account. These are just the basics that come into play. That is why rates are not "one size fits all".
If you are a hair dresser or coffee shop you might take more debit cards or retail cards. However, if you are keying all your transactions or taking business/corporate cards, because you are a business to business merchant, then your needs are completely different. That is why an agent asks for a statement. To see what kind of cards you're taking and fees you're paying to price you properly or in some cases to take advantage of you!
So how do you know if you're saving money? If you're an Interchange merchant than you can see the difference in the basis points; you know what's lower than what you currently have. If you are on tiered plan make the agent disclose all three tiered rates (don't forget you might have to do the downgrade math). You can tell what rates are lower when you have everything disclosed.
There are other costs involved such as transaction fees, monthly fees, batching fees, annual fees, and other assorted fees that can have an impact on the costs. But if you don't have the right information or understand the basics between Interchange and Tiered pricing then you never stood a chance in the first place to make the right decision!
Microsoft Dynamics GP
Run your business the way you want to with a business management solution that allows you to use familiar, powerful software to operate and grow your business. With two editions of pre-selected software functionality to choose from, you can add the components you need for your business solutions.
Business Intelligence
Transform data into actionable insight with enhanced business intelligence (BI). Keep people at all levels in your company privy to the details of your business by offering the reporting and analysis tools they need to effectively monitor, analyze, and plan. With business intelligence, you can maximize your resources to make more informed decisions.
Business Productivity
Take your company productivity to new heights by integrating Microsoft GP's enhanced functionality tools. Enable your people to take on the most complex business challenges by equipping them with the right resources. With increased business management functionality and advanced collaborative capabilities, you can empower your people with familiar solutions, resulting in greater productivity.
Compliance
Leverage compliance from a hassle to a business advantage with expedited regulatory compliance. Microsoft Dynamics GP provides cost effective solutions to implement and monitor corporate compliance all the while lessening any associated challenges. Complying with regulations, industry standards, and corporate quality initiatives does not have to be complex and costly but instead a way to stay ahead in your industry.
Financial Management
Take control of your financial management my reducing valuable time spent on routine tasks. With tight integration between modules in Microsoft Dynamics GP, you can enter data one time and provide real-time information throughout your financial solution without sacrificing accuracy.
Human Resources Management in Microsoft Dynamics GP
Track every aspect of human resources including your personnel-related processes, benefit programs, manage payroll, offer employee self-service capabilities, and deliver the information your managers and executives need. With Microsoft GP, integration with leading payroll service providers, such as ADP, makes it easy to share data and simply the payroll process.
IT Management
With Microsoft Dynamics GP, you don't just receive business powerful analysis tools, you are also giving your IT team the flexible and familiar platform it needs to take charge of its budget and build your business value at lower costs.
Supply Chain Management
Manage the entire supply process and help keep goods flowing, communicate partners, and gain loyal customers by using integrated systems that link functions across your organization. Reduce time-to-market and improve your control over your entire supply chain.
Business Intelligence
Transform data into actionable insight with enhanced business intelligence (BI). Keep people at all levels in your company privy to the details of your business by offering the reporting and analysis tools they need to effectively monitor, analyze, and plan. With business intelligence, you can maximize your resources to make more informed decisions.
Business Productivity
Take your company productivity to new heights by integrating Microsoft GP's enhanced functionality tools. Enable your people to take on the most complex business challenges by equipping them with the right resources. With increased business management functionality and advanced collaborative capabilities, you can empower your people with familiar solutions, resulting in greater productivity.
Compliance
Leverage compliance from a hassle to a business advantage with expedited regulatory compliance. Microsoft Dynamics GP provides cost effective solutions to implement and monitor corporate compliance all the while lessening any associated challenges. Complying with regulations, industry standards, and corporate quality initiatives does not have to be complex and costly but instead a way to stay ahead in your industry.
Financial Management
Take control of your financial management my reducing valuable time spent on routine tasks. With tight integration between modules in Microsoft Dynamics GP, you can enter data one time and provide real-time information throughout your financial solution without sacrificing accuracy.
Human Resources Management in Microsoft Dynamics GP
Track every aspect of human resources including your personnel-related processes, benefit programs, manage payroll, offer employee self-service capabilities, and deliver the information your managers and executives need. With Microsoft GP, integration with leading payroll service providers, such as ADP, makes it easy to share data and simply the payroll process.
IT Management
With Microsoft Dynamics GP, you don't just receive business powerful analysis tools, you are also giving your IT team the flexible and familiar platform it needs to take charge of its budget and build your business value at lower costs.
Supply Chain Management
Manage the entire supply process and help keep goods flowing, communicate partners, and gain loyal customers by using integrated systems that link functions across your organization. Reduce time-to-market and improve your control over your entire supply chain.
Inventory Types and Cost
Exploring accounting bookkeeping topics, one of the essentials is to learn inventory accounting, since this is one of the most important assets business owns and uses in its activities on a daily basis. This article will explore the main inventory types and present basic concept of inventory value to be accounted for when acquired.
Concept and Types
Inventory is attributed to current asset category since it is being used in the activities of the business within the period shorter than one year. For manufacturing or trading company this is one of the most important assets since it usually generates sales revenue for the business when being sold, i.e. significantly contributed to the profit earning activities.
Following the matching principle of accounting expenses are recognized and included into the Income Statement only when they were incurred to earn revenue. Therefore when inventory is acquired or manufactured it is included into current asset category on the Balance Sheet and is kept there until is being sold or consumed in other way to earn revenue.
When inventory is sold, only cost of sold items is included into the Income Statement - Cost of Goods Sold caption. Inventory remaining on hand is still reflected on the Balance Sheet.
Depending on the type of business activities there might be different categories of inventory, i.e.:
Cost of Inventory Acquired
Concept and Types
Inventory is attributed to current asset category since it is being used in the activities of the business within the period shorter than one year. For manufacturing or trading company this is one of the most important assets since it usually generates sales revenue for the business when being sold, i.e. significantly contributed to the profit earning activities.
Following the matching principle of accounting expenses are recognized and included into the Income Statement only when they were incurred to earn revenue. Therefore when inventory is acquired or manufactured it is included into current asset category on the Balance Sheet and is kept there until is being sold or consumed in other way to earn revenue.
When inventory is sold, only cost of sold items is included into the Income Statement - Cost of Goods Sold caption. Inventory remaining on hand is still reflected on the Balance Sheet.
Depending on the type of business activities there might be different categories of inventory, i.e.:
- finished goods for sale (manufacturing company) or goods for resale (trading company)
- work in progress (manufacturing company)
- raw materials (manufacturing company)
- consumables (low value items and miscellaneous items to be used in daily business activities)
Cost of Inventory Acquired
- There are certain expenses which to be included into the acquisition cost of inventory and accounted for in the Balance Sheet, i.e.:
- import duties
- transportation costs (carriage in) - expenses incurred by the buyer to transport inventory to the storage place
- other costs directly attributable to the acquired inventory (for example assembly, packaging, etc.)
Cost of the raw materials to be included into expenses only when it will be used in manufacturing process and finished goods will be sold, i.e. sales revenue will be earned.
D Inventory (raw materials - current assets category) $5,510C Cash (Accounts Payable - if inventory was acquired on credit) $5,510
Compliance Testing and Training
In the wake of our nation's most troubling economic recession since the Great Depression, regulatory committees, corporations, and small businesses alike have begun waves of compliance testing meant to provide financial oversight and some measure of protection against liability for their transactions. Of particular interest are the new measures taken by the IRS and the large corporate banks who deal in providing income tax refunds and their related services.
Knowing the potential for financial instability inherent in any series of large-scale transactions, in particular the now almost-extinct Refund Anticipation Loan market, financial regulators seek to curtail the effects of this latest challenge to our country's financial woes by introducing sweepings reforms to the practices of income tax preparers. In prior years, the vast majority of income tax preparers were held to no professional standards, nor were they required to hold any level of documented competency in income tax preparation.
Those days are now long gone. While a preparer can choose to run a tax business without following the standards set by the IRS and the banking institutions, doing so is a disservice to your clients and the integrity of the industry as a whole, while putting the office at risk for legal action and unnecessary liability.
Compliance training and testing - while daunting or even intrusive to some - is a 'necessary evil' for working in today's tax preparation industry. Not only is its intention to safeguard against the depredations of those taxpayers intent on fraudulently manipulating the system, it also adds an air of legitimacy to your business by allowing you to conform to the highest professional standards available.
Compliance training and testing serves two main purposes. The first and most important is reducing your liability for the information provided by your clients.
Imagine, if you will, an audited taxpayer claiming that you placed fraudulent information on their tax return, or that you never had permission to file their return in the first place. Such a scenario is preventable simply by following the compliance guidelines provided by the IRS. At the very least, complying with the guidelines allows you separation from the information and contents of the returns you prepare. You are, after all, paid to put in the information that your clients specify.
Secondly, compliance training and testing provides knowledge about an institution's procedures and the steps they take in their financial process, along with an explanation or grasp of why. For instance, most banking compliance testing involves a highly interactive learning and testing process that gives the preparer a bevy of information on exactly how the bank conducts its business to provide taxpayers with their money. This is useful in the sense that you can be prepared to knowledgeably answer your clients' questions, as well as understanding what to expect in the case a problem arises.
In essence, following compliance guidelines not only confers professional responsibility and legitimacy to your business, it also protects you from many scenarios where you actually risk losing your ability to provide specific banking services, or even be barred permanently from income tax preparation services entirely. The IRS and banks are very serious about their newest series of mandates on tax preparation and bank product services, and just by following compliance guidelines - often as simple as maintaining copies of certain documents, signature pages, and identification - you can prevent yourself and your tax practice from a world of trouble.
Knowing the potential for financial instability inherent in any series of large-scale transactions, in particular the now almost-extinct Refund Anticipation Loan market, financial regulators seek to curtail the effects of this latest challenge to our country's financial woes by introducing sweepings reforms to the practices of income tax preparers. In prior years, the vast majority of income tax preparers were held to no professional standards, nor were they required to hold any level of documented competency in income tax preparation.
Those days are now long gone. While a preparer can choose to run a tax business without following the standards set by the IRS and the banking institutions, doing so is a disservice to your clients and the integrity of the industry as a whole, while putting the office at risk for legal action and unnecessary liability.
Compliance training and testing - while daunting or even intrusive to some - is a 'necessary evil' for working in today's tax preparation industry. Not only is its intention to safeguard against the depredations of those taxpayers intent on fraudulently manipulating the system, it also adds an air of legitimacy to your business by allowing you to conform to the highest professional standards available.
Compliance training and testing serves two main purposes. The first and most important is reducing your liability for the information provided by your clients.
Imagine, if you will, an audited taxpayer claiming that you placed fraudulent information on their tax return, or that you never had permission to file their return in the first place. Such a scenario is preventable simply by following the compliance guidelines provided by the IRS. At the very least, complying with the guidelines allows you separation from the information and contents of the returns you prepare. You are, after all, paid to put in the information that your clients specify.
Secondly, compliance training and testing provides knowledge about an institution's procedures and the steps they take in their financial process, along with an explanation or grasp of why. For instance, most banking compliance testing involves a highly interactive learning and testing process that gives the preparer a bevy of information on exactly how the bank conducts its business to provide taxpayers with their money. This is useful in the sense that you can be prepared to knowledgeably answer your clients' questions, as well as understanding what to expect in the case a problem arises.
In essence, following compliance guidelines not only confers professional responsibility and legitimacy to your business, it also protects you from many scenarios where you actually risk losing your ability to provide specific banking services, or even be barred permanently from income tax preparation services entirely. The IRS and banks are very serious about their newest series of mandates on tax preparation and bank product services, and just by following compliance guidelines - often as simple as maintaining copies of certain documents, signature pages, and identification - you can prevent yourself and your tax practice from a world of trouble.
Subscribe to:
Posts (Atom)
Articles Online
LinkWithin
