How to Choose the Best Accounting Software

Accounting is an integral part of any business. Even small businesses have to observe strict and efficient accounting practices in order to make sure that the data received about the company's progress are true and reliable. That is why to make things more secure, the use of accounting software has to be adopted.
Here are important tips that can help any business owner get the best and most suitable accounting software.
1. List which common accounting software features are needed.
These features may include:
-Inventory management
-Sales tracking
-Contact management software
-Merchant account support for credit card payments
-Budgeting and estimates
-Payroll
-Business tax reporting
There are also accounting soft ware packages that are especially designed for industries like construction, manufacturing and wholesale distribution.
It would also be helpful to talk to others about accounting soft ware. Before purchasing accounting software, it will be best to ask people who are already using the said software. Their insights and experience with the software will be enlightening.
2. Know more accounting software feature choices
A good feature of accounting soft ware is having modules that can be added to the existing software after a while. However, if this is not possible, it would be good if the software can be upgraded easily to a more capable version.
It will also be helpful if the accounting soft ware is supported by the business' bank. This would definitely save time and effort for the company.
The user should also be asking if the accounting soft ware is online. Being online means it is web-based that runs securely through an internet browser. This would prove convenient and time-saving especially at times when there is a need to access data from another computer.
Access to data is also another thing to be considered. What is the extent of the accounting soft ware accessibility? Can all people gain access to everything that is being stored in the software? Or maybe, there are only certain information that can be displayed to the public.
The accounting software must have a free trial so the user can experience it.
3. Accounting software account options
It may be natural for manufacturers of accounting soft ware to charge fees for technical support. But ideally, the support through email and phone should be given for free during the first few months as the user still tries to get acquainted with the installation and use of the software.
4. No payment for features not being used
It would not be wise for a business owner to buy accounting soft ware that has services and features that are of no use to the company. Naturally, the software that has more features is actually more expensive. So, if the accounting software needed is just very simple, then it would be alright to buy the one which provides only the necessary features.
5. Accountant vs. accounting software
An accountant can do a lot of relevant tasks for a business. However, any good accounting soft ware can deliver the reports needed by a company. And these reports can be forwarded to an accountant who is hired only on a contractual basis. This way, the company is able to save on professional fees.
Accounting soft ware should not replace the accountant especially for legal issues and concerns. However, these definitely save money for the company.

Why Your Business Needs an Income and Loss Statement

The one thing that is going to keep any business running is money. Every business need cash in order to keep their operations going and in order to get money all business need to be profitable all the time. However, how do companies make sure that they're earning money and not taking a loss over a certain time period?
A profit and loss statement is what many organisations use in order to find out if they're on the right course. It's basically an announcement that shows a company what expenses it has made, just how much revenue they have brought in and how much cash it has made or lost during a certain time period, which could be between several months to a year.
What type of business would use a profit and loss statement? Essentially each and every company in the world must have some sort of statement that they receive on a regular basis that shows them what their expenses, revenue and overall net gain or loss continues to be a duration of time. It doesn't really matter if it's a large business or a small one.
Generally speaking, very large businesses that have a long history of being profitable will still use these statements in order to make sure that they stay on the right track. To include in that, really small businesses and those that are just getting started should truly use them as well since they are the most vulnerable since they generally have the lowest amount of cash.
When should companies get a profit and loss statement? It truly depends on the size and vulnerability of the company. Large companies that have a lot of cash available can get away with receiving these statements every quarter or so, however, that won't work out for smaller businesses.
Smaller businesses that are very vulnerable and don't have a lot of cash on hand may wish to receive these statements frequently. That is because they're more vulnerable and need to make certain that they're profitable at all times and, if they're not, they have to make some very quick changes in order to turn things around.
Where can businesses go in order to get profit and loss statement? This can be something that businesses are capable of doing themselves, or it can be outsourced to another company that handles financial matters. Having it done in-house might be alright for some companies, however, it turns out to be unprofitable in the long run.
A company's best bet is to outsource the financial responsibility of putting together these statements to a company that specializes in doing so. This is because a business that does that will not have to pay employees to get the job done, which saves the organization time and money. To add to that, companies that specialize in providing financial reports will provide a business with the best and most accurate data.

New Federal Law Provides Income Tax Relief Assistance to Americans in Need

Last year signed into law by President Obama on December 17, 2010 was the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (2010 Tax Relief Act).
120 Day Extension
As an interest to aid to U.S. Taxpayers who have been contacted by the U.S. Internal Revenue Service, the Federal Government is granting an automatic additional 120 day extension to respond to the IRS inquiries by way of simple written request. This added four month extension to respond without additional tax penalty or accumulating interest will continued to be allowed by way of this Act only through the year 2012.
This added time allows the taxpayer needed reasonable time to retain a Tax Professional: Attorney, Certified Public Accountant (CPA), or an IRS Enrolled Agent (EA) to handle their outstanding income tax issue and comply with the IRS filing requests or payment requests to date. With this Professional Tax Relief engagement the taxpayer can readily have the IRS stop any Wage Garnishments, Account Levies, or Property Liens that may have been locked in place by the U.S. Department of Treasury right away in requesting this 120 extension. Then within this time the Taxpayer can be brought in Compliance with the IRS by simply making outstanding filings without payment at this time, or arrange a payment plan addressing payments due with Tax Penalty Abatement, or seek an Offer in Compromise Settlement based upon ability to pay.
This professional Tax Relief as explained can provide instant monetary relief from IRS, Wage Garnishment, Levies, & Liens and also relieve one from further current collection efforts of the U.S. Department of Treasury- IRS.
Some other aspects of the 2010 Tax Relief Act that addresses the common taxpayer are:
Tax Rates
An Individuals' taxable income will continue to be subject to six tax rates at 10%, 15%, 25%, 28%, 33% and 35% through 2012 with the expanded 15% bracket for married joint filers that will provide marriage penalty relief is also extended through 2012. Estates' taxable income will continue to be subject to five tax rates of 15%, 25%, 28%, 33%, and 35% through 2012.
Qualified Dividends Rates & Capital Gains Rates
In addition, the 2010 Tax Relief Act extends the 0 and 15% rates on adjusted net capital gains through 2012. Also extended is the treatment of qualified dividend income as adjusted net capital gain, taxable at the same 0 and 15% maximum rates through 2012. The Act extends the 0 and 15% Alternative Minimum Tax rates on adjusted net capital gains through 2012 as well in less common circumstances.
Employee Payroll Tax Reduction
The employee portion of Social Security taxes has also been reduced from 6.2 to 4.2 percent for 2011 wages only at this time. The employer portion will remain at 6.2 percent. A similar rate reduction applies to the railroad retirement tax as well.

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.

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.

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:

• Pay bills - Accounts Payable
• Recognize revenues - Accounts Receivable
• Process payroll - Payroll Administrator

Other tasks associated with an accounting department are: Cash management, bank reconciliations, budgets, financial reporting and taxes. In large businesses each of these functions is performed by one individual or more. In smaller firms, tasks are shared and staff is supervised by a manager or a controller, who often is responsible for financial policies and procedures for the organization.
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.

Control Is the Name of the Game Using Business Accounting Software

This year start afresh with an accounting program that you can understand, that saves you time and therefore that saves you money and gets rid of all that frustration! Take control and get those figures onto a decent accounting software program where you can really see what is happening in your business. Make a concerted effort to turn the corner and start to really make use of the amazing time-saving technology that is out there.
Where to begin? Good question! You will need to do a little research before you take the plunge and invest in an accounting program. Remember that there will likely be a slight learning curve at the beginning with any software you choose. So no worries if you find it a little confusing at the beginning. In fact this is a great time to check out the support available - and if you get help whilst you're trialling an accounting program then that might be a great indicator about the sort of help you can expect once you are a customer.
In a good accounting program you simply start by entering data. Simple transactions From one account and To another are entered one by one. This way you can see exactly the flow of money into, through and out of your business. As you enter data you would do well to choose an accounting program that immediately updates those transactions to your chart of accounts so you can see a live Trial Balance at any time and assess exactly the state of your business now. Your finger is on the pulse of your business. This is probably the key point that you will benefit from by going the software route.
A great accounting program will be relatively straightforward to use and will start at a good price too so you can afford to take that step and get going on your new, organised way of arranging your affairs. Some companies offer a one-off payment so that you can use the software for life at no further cost!