Organized Finances Ensure Business Success

English: Findlay, Ohio, September 20, 2007 -- ...
English: Findlay, Ohio, September 20, 2007 — Gilbert Yingling, a representative with Small Business Administration (SBA) makes calls to local business owners from a local chamber of commerce business directory as part of an SBA outreach program. He then follows up with person to person meetings with the business owners. John Ficara/FEMA (Photo credit: Wikipedia)

It is important for any business to keep its finances in order. Numerous websites stress this, such as the Scott Reiman crunchbase profile. Having organized finances ensures that business owners will always be able to know where their businesses stand and whether or not they are incurring profits or losses. If they are incurring losses, then they might need to reevaluate their business structure and marketing tactics and change them to find a more effective solution that works. It is also important for businesses to have their finances in order for tax purposes as well. There are a few tips that business owners can keep in mind to help keep their business’s finances organized.

Retain a CPA

Retain the services of a certified public accountant. Accountants are one of the most important resources that a business can have. Accountants are skilled in ensuring that finances are in proper order. They are also invaluable to helping business owners make informed decisions concerning their businesses. Accountants can generate virtually any type of business report that owners need to determine where their business stands in the way of successfulness.

Re-evaluate Business Entity

Many business owners begin their businesses as sole proprietorships or partnerships. However, over time and with expansion, it might be ideal for them to incorporate their businesses or form an LLC that can help shelter them from financial risks. Incorporating a business entity or forming an LLC can also help business owners save money on their taxes. Additionally, failing to adjust a business’s entity to accommodate a different income level could end up being a costly mistake. Business owners might want to discuss their different entity options with a CPA so that they can determine the right entities for their businesses and the appropriate times to make any changes, if necessary.

Review Estimated Tax Payments

Business owners have to pay estimated tax payments, which are quarterly payments. Underestimating estimated tax payments can result in penalties for businesses, so when estimating estimated tax payments, round up rather than down. It is better to overpay than to underpay because anything that is overpaid will be returned back the business in the long run when tax refund time rolls around. By properly estimating taxes, business owners can prevent underpaying and overpaying, though. Reviewing what the business has earned year to date and then projecting what it is expected to earn throughout the rest of the year is how estimated taxes are discerned.

Keep Business and Personal Finances Separate

One of the most important rules to managing business finances is to keep them separate from any personal finances. Although this is not mandatory for sole proprietorships, it is mandatory for corporations or LLCs. It is still a good practice for all business owners to employ, though. Open up separate accounts strictly for the business that are separate from any personal accounts. Likewise, have debit cards that are solely for the business as well. It is also a good idea to open up a dedicated savings account or money market account where approximately 25 percent of each check can be transferred to save for estimated tax payments.

No matter whether a business is large or small, keeping its finances properly maintained is essential to appropriate business operation.

Accounting For Your Business

What's in the bag? Business of Software 2010
What’s in the bag? Business of Software 2010 (Photo credit: betsyweber)

Running a small business can be one of the most time consuming and stressful experiences in life. It is important that you have book keeping services that are accurate and reliable in order to avoid financial problems in the future. However, there are thousands of business owners that deal with book keeping nightmares on an annual basis, this is something that you could protect yourself against. When you take advantage of the best free online accounting services, you would be able to keep all of your finances organized without having to worry about wasting money. This service will not subject you to an expensive monthly charge, you do not need to enter a credit card in order to sign up.

If you hope to become very successful with a small business, you will need to limit the amount of money that you are spending. However, many business owners spend a large amount of money on a regular basis in order to have all of their finances organized and taken care of. The solution to this would be a great free online accounting service that would provide you with a much better value. It is possible to save a large amount of time, effort and stress that you would be subjected to when dealing with financial problems. Instead of having to experience these problems, it would be wise to start using this program today for all of your financial needs. You would protect yourself against financial disasters while also saving money and with this great technology today.

Hiring an Accountant: Questions You Need to Ask

When you’re running your own business, finding the right accountant is imperative. Many people think they can cut costs by managing their finances themselves but this can be risky, as any mistakes can severely affect your business. A proficient accountant doesn’t merely fill out your tax return; they should also offer you sound business advice. That’s why you need to ask the right questions at the very beginning of the hiring process. You need to find out if the CPA has your best interests at heart and if they will offer you more than just doing the paperwork. To help you determine if they’re right for you, here are four important questions to ask.

1. Do I trust them?

This is possibly the most important question because if you don’t, you should probably head for the door! You need to feel comfortable with your accountant, as they’ll be handling something very personal and absolutely vital: your finances. According to sme-blog.com, you should always trust your instincts. An accountant should be an advisor and any sign of being pushy should be a warning. If you have any doubts, you can always ask about their CPA credidentials and licenses, then double check online or with the relevant licencing authorities.

2. Will they show me how to make money?

This is the next most important question. According to BusinessSuccessforLife.com, an accountant should help you reduce expenses and minimise tax, but they should also be able to tell you how to maximise profits and personal wealth. When it comes to business planning, they should be able to think out of the box and offer ways for you to be financially efficient.

3. How much am I going to pay?

Accountants certainly don’t come cheap, but you can avoid a few nasty surprises on their invoice by seeking clarification upfront. According to btkcpa.com, some accountants charge by the hour, some want an overall total payment and others use a combination of both. You also need to find out if they charge for things like phone calls and sending faxes. The more unscrupulous kind will charge an hour’s fee for a five minute phone call. Accounting firm btkcpa.com suggests that in order to reduce fees, you should ask your CPA if you can prepare documents beforehand, as this will save time and money.

4. Will I be dealing with one person?

It’s good to build a solid, long-term relationship with your accountant, so you need to know if you’ll be dealing mainly with them or with multiple people. Larger firms tend to assign a number of people to fill out your tax returns, but btkcpa.com says that, ideally, you just want to deal with one person.

The two of you should work in tandem, with the accountant primarily assisting you to make the best financial decisions while building a good relationship along the way. When you’re hiring an accountant, you should keep these important questions in mind. Discussing them with a potential CPA can spare you many hassles further down the line.

Ang Lloyd writes on behalf of Now Learning, an online education portal that promotes a diverse range of study options in Australia, including business management and accounting courses.