‘It’s 28th today, shit man still a week to go before my salary gets credited!!’
Every working professional has been in this spot. And unarguably, the reason remains the same-’Poor Accounting’. Well, if you are wondering what has accounting to do with this then you are still in your learning stages. However, you may have witnessed either your mom or dad noting down all the monthly expenses and preparing a budget accordingly. Yes, this is also an accounting practice.
Accounting isn’t just a profession, it is a trait that every individual needs to inherit. Without proper accounting of your financials, you will always keep wondering, ‘Where exactly does all my money go?’
The same goes for businesses as well. Every business, irrespective of its size, needs efficient accounting practices to make sure they aren’t lagging behind their competitors and always wondering about managing their finances. This is where the need of certified Accountants and Accounting firms arises since, “An Accountant is someone who knows the cost of everything and the value of nothing.” However, hiring an Accountant isn’t as easy as it sounds. You have to take various factors into account.
So, if you are searching for an Accountant, here are a few tips that can be of help to you.
Identify your Accounting Needs
The first and most vital step when hiring an accountant is to make a note of your accounting needs. Accounting isn’t just one task, it is a collection of various processes and each process needs experience and expertise. Here are a few Accounting tasks to take into consideration before you hire an Accountant:
- Business advisory services
- Accounting and Bookkeeping
- Tax advice
- Financial analyst
It would be wise if you know what Accounting services are you exactly looking for instead of jumping straight in.
Post a job with the relevant keywords
In today’s digital world, keywords play a vital role both for the searcher as well as the publisher. Therefore, once you know exactly what you want, then comes the task of posting the job that includes the right keywords so that it can be found easily by the searcher. Use terms like Accounting, Bookkeeping, Bookkeeper, Accountant, Auditor, etc to increase its reach.
When posting an Accountant requirement job, make sure you mention your requirements and budget correctly since it all comes down to these 2 factors.
Leverage the power of Social Media
While you can advertise the job vacancy on various job portals, it is not necessary that you will get a response. In such cases, leveraging the potential of social media can come in handy. LinkedIN which is a social network is considered to be the largest platform where professionals from all around the world connect and share their experiences. It is also one of the best places to market your business as well as look for potential Accountants, when hiring.
It can help you build a professional network and/or find relevant referrals from other industry experts.
Conduct proper research
Accounting is a very crucial business process and you simply cannot handle all your financial data to someone just based on their online portfolio. Vetting candidates/ accounting firms before you make a decision is very important especially when in this digital era it isn’t hard enough to build a fake online reputation. Verify their work experience and qualifications that showcases their accounting skills.
Look for qualifications like CPA certification, their work experience with various accounting software, etc. Aso, go through online reviews and look for their genuinity before you move forward.
Shortlist according to your budget and requirements
Once you are through with the above processes, it comes down to shortlisting the best candidates according to your budget and accounting needs. While you may be looking for bookkeeping roles, an auditor may not be the perfect fit for the role. Therefore, before you invest time and money into hiring an accountant, make sure that they fall in the right category and fulfill your accounting needs.
Also Read – Common Accounting Challenges Faced by Accountants and How to Overcome?
Conduct an interview
Now since you have your best candidate shortlisted on paper, it’s time to conduct an interview and see if everything is for real. Try to focus on the overall personality of the accountant like his analytical and mathematical skills, attention to detail, working style, business acumen. After all, she is going to be handling your finances that will eventually reflect as your business growth.
The final onboarding stage concludes the hiring process. Make sure the new Accountant(firm) is welcomed and has all that they need to get started. Ensure that they are well-aware of your requirements, goals and objectives and are on the same page at the end of the day.
Hiring the right Accountant is very important after all you are going to hand over all your finances to the man. Follow the above steps and make sure you have employed the best man.
Preparing and filing taxes can be a real hustle to deal with. Not everyone enjoys preparing their taxes. But one can’t run away from the responsibilities of filing taxes. Every year the tax season arrives and with it comes the complexities of keeping up with the compliance’s along with the workload of handling lots and lots of paperwork.
However, even after knowing that tax preparation isn’t an easy task, many small business owners and self-employed individuals prefer doing it all on their own. And why exactly? Only to save a few bucks. But what they don’t realise is that the value of their time is no less than the value of their money. They spent their valuable time preparing for tax filing. And the sooner they realise this the better. Instead of doing all the hustle and bustle by self, hiring an accountant can be a wise choice. After all, is it always wise to hand over the task to a professional or to make it more relevant, hire someone who does this for a living?
But is there a right time to hire an Accountant to do your taxes?
A question that usually comes up is “When Should You Hire an Accountant to Do Your Taxes?”
Well, let’s find out.
Hiring an Accountant to Do Your Taxes
Paying taxes on-time is every citizen’s responsibility. However, getting tax ready isn’t an easy nut to crack especially if you run a business or are earning more than $500,000 per year. In such cases, it is always wise to hire an accountant who does tax preparation for living. This way you can avoid the penalty of the IRS as well as save your precious hours to invest in your domain.
You’ve recently received an inheritance
There may be cases when you might get your hands on an inheritance. But it can add to your tax filing complexities. Owning an inheritance means you can owe estate tax, inheritance tax or capital gains tax. While you are dealing with the tax complexities of your new inheritance, considering to hire a professional accountant can ease your task. It would be a wise option to let the professional do his/her job.
Also Read About – What is Accounts Payable?
The IRS has contacted you recently:
Be it an individual taxpayer or a business owner filing taxes on behalf of his company, the IRS has the right to contact you in case they find any discrepancies or any other fraudulent activities in your filing. And with little or zero knowledge of the subject matter, such situations can put you in a tough spot. This is another situation where hiring an Accountant can be your best option. An accountant is well aware of the government policies and how they can help you to minimize the penalty in case of under- or over payment.
Planning for your retirement
Hiring personal Accountants can be a great idea to invest in if you are planning for your retirement. These professionals can be any of the following:
- Enrolled Agents (EAs),
- Certified Public Accountants (CPAs) and
- Registered Tax Return Preparers (RTRPs)
Figure out what your needs are and you want to invest and decide for yourself what’s best for your business. Each of the above highly-skilled professionals can offer you a wide variety of services and solve your various planning and tax return issues..
Consult for Accounting Services for Small Business
Over time, the job of an Accountant has always been important to businesses and has evolved into various branches. One such branch is where skilled Accountants can take over business advisory roles for you and help manage your finances with expertise. They can also offer valuable insights on your current financial position and help plan for the future accordingly.
Accountants affect our everyday lives each day. Millions of jobs depend on an Accountant’s honesty, integrity and professionalism. Therefore, hiring one in times of need is a wise choice and can save you hours of trouble as well as help you deal with the complexities that arise when filing a tax return.
The ‘Bottom Line’, ‘Numbers’, ‘Sales’ are some entities that are self-explanatory in any business. Especially when it comes to real estate, the number of properties sold successfully and an impressive sales record are enough to reflect the business. But, all of this is true if their is uncompromising accuracy, vigilance and standardisation in the numbers presented and their credibility. Which is where experienced accounting comes in the picture. Showing a promising real estate practice on the basis of inaccurate books can be a bane for your business and can tarnish your image in the industry as well as with your clients.
In this blog, we will talk about the common real estate accounting mistakes that your business needs to avoid in order to get through the tax season seamlessly. If you are cautious to dodge these commonly encountered errors, then not only will your books be accurate, they will also be dependable and actionable.
Mistake No 1: Realigning Funds Before the Transaction is Complete
This is a very common business error, if we may say with property and real estate accounting. The entrepreneurs are seen to be disbursing the funds before the deal is closed. This not only is a malpractice, but at the time of doing the books, is an additional wastage of time for your bookkeeper, as they need to go back and check the completion and the authentication of each transaction that you have made. In accounting terms, a transaction is considered revenue and can thus be acted upon only when the chain is complete, in real estate terms, it is when the keys are finally exchanged.
It is important for real estate entrepreneurs to keep this in mind at all times while confirming a transaction to be a revenue or before its disbursement. So that, your Accounts Payable are accurately aligned with your Accounts Receivable.
Other Blog – IRS Tax Relaxation Deadlines for Covid-19 (With State Regulations)
Mistake No. 2: Tracking Commissions Additionally From an Accounting Software
When your brokerage is tracking commission additionally and alternatively from the main accounting software that you are using, then you are backing up on age-old data entry to pay those commissions. Honestly speaking, this redundant data entry puts you at a greater risk, with your books being rampaged with human error and threats.
Ideally, using accounting software or any accounting technology is a matter to make things simpler and more convenient. Therefore, you need to have a commission management system in place that can seamlessly integrate with your accounting system and help make things more convenient for you.
Mistake No. 3: Insufficient Training of the Accounting Software
If you have an in-house or a local accountant, who you are presuming will be on track with the technological developments and has a proficiency in the accounting software of your choice, then you might be going far-fetched. The idea is that you need to have someone who is an expert and a thorough professional when it comes with dealing with your accounting tools so that bookkeeping is an easier and more convenient feat. If you take it into consideration, having someone who is not-well versed and trained in these tools, will not be able to optimize the efficiency of the same and might make errors. Therefore, it is essential to have someone who is trained and has a smooth knowledge of state-of-the-art accounting tools and technology, especially the ones preferred for use by your business.
Mistake No. 4: Not Taking Backups
This is a mistake that cannot be stressed-on enough. If you are an entrepreneur, then you need to know gone are the days, when people had stacks of paperwork in physical form, that they could go back to and tally whenever needed. This was not only time consuming, but took a lot of space and was adept with errors on all levels. With the coming in of the right accounting technology, you need to save time, effort and error. Taking backups of your data is ever-important so that you have securely kept all your essential financials readily available whenever needed. Real estate businesses are generally seen to lack in this imperative feat.
Real Estate is an exhaustive and a challenging field. You need to constantly be at your alert-best and on your toes. But the accounting part of it, need not be that dreadful if done the right way. Being on the right road of accuracy, having a dependable team that backs your efforts and avoiding these common accounting mistakes can help you keep up with your books and also get through the year-end stress-free. We hope this blog will help you highlight some common errors, and avoid them in your future accounting journey.
Not everyone knows the nitty-gritties of Accounting for a Restaurant, and neither is that proficiency expected. Especially not with Restaurant managers. You already have your plate full literally with a lot! The pain of keeping your books updated and accounting should not be one of them. However, knowing the blueprint of the main things to keep in mind while taking care of your accounting or its basics, can really help you manage your money better and understand your operations more efficiently.
And, because it is so important, we have put together this list of accounting principles 101, which will help you get ahead with your restaurant’s books and financials. No matter the type of restaurant you are running, a takeaway, stand-alone or a chain, there is something in this for everyone. Whether you do it yourself or hire an outsourced bookkeeping service, keeping these points in mind will benefit you greatly!
This is where we get the Chart of Accounts into the picture. Your primary goal should be to get this order. These are the buckets that are used to describe the funds that are flowing in and out of the business. This includes everything- assets, liabilities, expenses, revenue, etc. Now, you need to complete the chart by outlining the sub-categories in it as well. From marketing, to inventory, etc. All these items should accurately be recorded in your Chart of Accounts.
This is important as this is what is used for drafting any business financial statements and reports. These blueprints help you get the insights necessary for understanding where your restaurant is currently standing and where it is headed to.
Cost of Goods Sold
Cost of Goods Sold (COGS) refers to the total cost that goes into making the product or services that someone is selling. In your restaurant, it would basically mean the cost of all the ingredients that go into making your restaurant’s menu. The efficient way to calculate your total COGS is when you take your weekly restaurant inventory in terms of your beginning inventory and subtract your ending inventory, you get the cost of goods sold for your restaurant. But it is important to make certain that your cost of goods sold does not include any utilities and labour costs added to it. It should only have the cost of the actual ingredients that go into making your menu. The essence of doing this all, is to keep a tab on the cost of each plate of food that is sold at your restaurant, so that you can make a healthy profit and excel better.
Keeping a tab of the Labor Cost, Occupancy Expenses And Operating Expenses
The Cost of Goods we spoke about earlier, does not include the labour costs or added utility expenses. But in order to know the accurate financials for your business, it is important to know each detail of your restaurant’s expenses correctly to be able to take the right steps and make beneficial decisions. Your operational costs like- labour costs, occupancy expenses, etc. all need to be divided into different categories. It is important to know that every restaurant differs in its operational costs. Therefore, keeping a close check on them will help you to work towards more rewarding profits in the business. It is necessary to also add the payroll taxes and employment benefits to this category.
Another part to add are the occupancy expenses like rent and property insurance also need to be accounted for. Knowing the difference between operating costs and occupancy costs are important.
More Blog – Building Trust From In-House To Virtual Bookkeeping!
Get Acknowledged with the Prime Costs
Your prime costs are what you get by adding your Costs of Goods Sold with the labour costs. This primarily includes Accounting for Restaurant primary expenses. Therefore you need to pay extra attention so as to avoid any mistakes or inaccuracies that may creep in these records.
Also, it is difficult to cut back on costs other than the prime costs, if you work effectively on these, you can also save on funds.
The fact is that to know the exact status of your finances, it is important to take it into account with other factors. No financial indicator, no matter how crucial it is can help you completely understand the financial space your business is standing in and where it is headed to. Out of common sense, you can imagine that if you are looking at a large restaurant, it will have more prime costs in comparison to a small restaurant that has a lower prime cost. But then this can’t help you come to a final consensus, up until you compare it with the sales in each.
Therefore to understand where your business is currently and where it is headed to, it is important to take into account the cost-to-sales ratio.
This is important as it allows you to compare your business with other businesses’ keeping in mind complete accuracy.
You No More Have To Worry About Restaurant Accounting
Restaurant Accounting does not have to become gibberish and a deterrent in running your restaurant effectively. If you have your accounts in place, are managing your costs effectively. In addition to that, if you have your accounts outsourced to a bookkeeper, then you can save on time, added costs and can focus on the core operations of your business.So that you get reliable data, actionable financials and all that you need to run your business with better insights.
The financial tasks of a business are handled both by bookkeepers and accountants, yet, when we are required to outline the differences between the two, it generally is a hard one. The fact is, that their goals and ambitions for the business are the same, but the way they achieve them are different. In a simple sense, bookkeeping is primarily concerned with transactions while accounting deals with the insights that are drawn on the basis of the information obtained through bookkeeping.
If you are a small business owner and are wondering, “how exactly are the two different?” and what is the right choice for your business, then you have come to the right place! In this blog we will outline all the differences between an accountant and a bookkeeper and how each benefits and adds to your business.
What is Bookkeeping?
Bookkeeping as a Financial task in a business, records the daily transactions that occur in a business in a standardised and regularised manner. It forms the base for any other financial function of an organization. Their tasks include:
- Recording Financial Transactions
- Assessing the Debits and Credits of a business
- Generating invoices and handling a business’ receivable funds
- Maintaining the General Ledger
- Organizing and administering payroll
Out of all the tasks mentioned above, maintaining the general ledger is of the prime importance. This is where all the transactions are recorded. How dynamic and complex an organization’s bookkeeping is, is primarily dependent on the size and stage of operations that business has.
What is Accounting?
This is the advanced financial task that works on the information and insights provided by a bookkeeper. This information is then used to draw future budgets and forecasts and other such financial models. Some of the tasks that are primarily typical to accounting include:
- Reconciling and entries that are mistakenly omitted.
- Financial Preparation statements, records and reports.
- Analyzing operational costs
- Completing, preparing and filing tax returns
- Draw the financial blueprint of a business.
It is an accountant that draws the key financial indicators of a business and determines an analysis of the cash flow.
Therefore, it is an accountant that takes the information in the General Ledger provided by the bookkeeper and takes it forward to the larger insights drawn through those recordings. Where bookkeeping ends, accounting begins.
Accountant vs Bookkeeper
The work of an accountant and a bookkeeper are often seen to be overlapping. In fact, some can say that bookkeeping is a sub-task of accounting only. The only difference is that bookkeeping is a financial operation that needs to be undertaken on a daily basis and is regularized. Therefore, it is imperative to do it in its regularized manner. Only, when this is done accurately, can an accountant work on the information provided by the bookkeeper.
Records the financial transactions that occur in the business.
Work on the financial transactions recorded to provide broader insights.
Recording the debits and credits of a business.
Curates the financial statements, records and reports.
Generates invoices, sends them ahead and tracks payments.
Prepares taxes and files them.
Maintains the general ledger.
Uses the general ledger to prepare financial analysis and strategy to support the business.
Administering Tax strategies
Determines where a business is standing.
Determines where a business is headed to.
Financial record keeping in a business
Financial forecasting and overall financial administration of a business.
What Do You Need For Your Business?
Now comes the burning question. What do you need for your business? An accountant or a bookkeeper? Before you ask yourself that, try assessing answers to the following questions:
- What industry is your business in?
- How large are your operations?
- How many employees does your company currently have?
- What is your business’ goal?
Why these questions are necessary is to make you understand where your business is currently standing and where it is headed to in the future. Now, the fact of the matter is that a bookkeeper and an accountant are co-dependent and cannot exist without one another. Additionally, it is always a perk to have a team that can handle both. Not only does it help save costs, but it also leads to better accuracy, more coordination and an overall synchronization of timely deliveries and compliances.
Another lucrative option that businesses have these days, is the option to seamlessly integrate the tasks of an accountant and a bookkeeper, by outsourcing these activities to a bookkeeping service provider. What your business thus gets, is:
- A team of expert bookkeepers and accountants.
- Someone who can handle both administrative tasks like payroll and financial tasks like taxing effectively.
- Increased cost and time savings.
- Savings on overhead and operational costs.
- State-of-the-art accounting technology and tools.
Now is the time to get better control of your business’ financials by outsourcing it and gaining the expertise of industry leaders. No matter the stage and size of your business, it is never too late to have the professional support of ace bookkeepers and accountants on your side.
No one ever said that running a business would be easy. In fact, it is one thing to run a business, and it is a different thing to be able to keep up with the changing times and by responding to it with scaling up and evolving your business. A business is only as good as the efficiency it is run with. The time you put in it, the resources you foster it with and the team that is behind making it a success.
A profitable business is always the one that has impeccable logistics and operations. Because when you are able to micro-manage your business well, then you are able to take care of the larger picture of making profits and expanding operations.
When talking about bringing efficiency in logistics, what comes on top of the list is accountancy and bookkeeping operations. When your business is small, it is easier to manage its finances. But as it starts to grow, you are caught up in handling the sales, marketing, expansions and slowly the financial management starts being a hassle and ends up being ignored.
This is where virtual accounting comes in the picture. Their team of expert professionals help take off the load of your operations and prioritise your tasks.
How Virtual Accountant Helps Your Business?
Virtual Accountant is the game-changer when it comes to streamlining and organizing your business logistics better. Here are some of the benefits that your business can avail by choosing virtual accounting services:
Get Your Financial Reports When You Need Them:
The most important part of knowing where your business is situated at present and where it is headed to in the future are through financial documents. It is important to have updated, accurate and consistent documents. A virtual accounting firm, will help you in formulating updated financial documents to help you take care of the daily operations of your business and to run it efficiently at the tip of your fingers.
Also Read – Management Accounts for a vendor operating several stores
You Will Not Need to Hire and Train a Team:
When you have a team of dedicated and expert virtual accountants, then you no more have to find a team of qualified accountants, or train them. Because, virtual bookkeepers only hire the best in the business. Adept with all the highest certifications and qualifications. This helps you save time on finding the personnel that will fit the bill for your business.
Get Balanced and Updated Books Everytime:
You will no more have to face the wrath of the year-end stress, as your team of virtual accountants will make sure that you have accurate, updated and error-free books throughout the year. Your records will be reconciled and available in an understandable fashion at all times.
Help Your Business Get Better Work Management:
When you have time savings from not having to handle accounting tasks for your business, you will be able to delegate that for the betterment of the management and expansion of your operations. You will be able to take care of your business and run it efficiently.
Save Upto 50% Off Your Annual Accounting Budget:
With virtual accounting you will be able to save on the overhead charges of having an in-house accountant. Your cumulative savings on salaries, tax benefits, rentals and the added opportunity costs will help catapult other areas of your business. As with virtual accounting you only pay for the services that you avail for.
Gain Convenience and Flexibility:
The convenience of having a team of expert professionals available to your business around the clock will give you added flexibility. Because a growing business is dynamic and its needs can arise at any time, therefore, having a virtual accounting service will help you with your financial needs 24×7. Also, they grow as you grow and help in scaling up their services as you scale up.
Virtual accounting services is a one-way ticket to increased profit and for added peace of mind. With the evolution of how businesses are done, virtual accounting is the way to an organized future for your business. No matter the size and stage of your organization, virtual accounting will help you ace every sphere of your business’ logistics and operations.
We hope that through this blog, you will be able to find one of the many ways in which virtual accounting can help benefit your business. Get on with financial trend of the future, opt for virtual accounting services.