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15 06, 2019

Profit and Cash Flow – Determining the Difference

By |2019-05-30T18:10:18+00:00June 15th, 2019|Uncategorized|0 Comments

As an entrepreneur, it is easy to get excited about the capital and growth your new business accrues. Although your company’s profit and cash flow are positive financial elements, it is crucial to understand that both are different. Many excited business owners may misunderstand the difference of profit and cash flow and mistake the two as interchangeable concepts. Having a profitable business does not necessary translate as having sufficient cash flow to sustain itself. Regardless of the financial health of your company, it’s important to be aware and understand the difference between profit and cash flow. Profit can also be referred to as net income, or the difference between revenue and expenses. When companies incur profit, it doesn’t always mean immediate income. For example, you could sell a product or provide a service that costs $100 and send an invoice to your client the 1st of this month. Although you are earning revenue, at the time you completed the exchange, you will not receive cash until the invoice has been paid for by end of the month. Likewise, incurring an [...]

1 06, 2019

A Guide to Quarterly Taxes

By |2019-05-30T18:11:26+00:00June 1st, 2019|Uncategorized|0 Comments

Quarterly taxes generally apply to those who are self-employed or earn income as an independent contractor. As a business owner, you are responsible for paying your own taxes because you don’t have an employer withholding taxes for you. To address this, the IRS collects estimated taxes every quarter. By the end of the year, you will either owe money if you are short on taxes or get money back, depending on how well your business does. For those handling their own taxes, here is a brief overview to understand estimated quarterly taxes. How do I determine if I need to pay quarterly taxes? For those freelancing and expecting to owe more than $1000 in taxes (which amounts to approximately $3000 or more in profit), you may need to pay quarterly taxes. What do I need to track? Track your earnings in the form of paystubs or invoices. Tracking expenses can help lower how much you owe to the IRS. Here are a few common expenses that can be grouped as an “ordinary and necessary” expense for your business: mileage, home [...]

15 05, 2019

Use Community Leadership to Improve Your Business

By |2019-04-24T18:27:49+00:00May 15th, 2019|Uncategorized|0 Comments

Between the various responsibilities involved in running a business, getting involved in your community may not be high on your priority list. Although volunteering requires you to expend energy and allocate extra time, getting involved as a community leader brings many benefits and can facilitate new opportunities for your business. Here are a few ways in which becoming a community leader can promote your business: Help Others and Help Your Brand: What goes around comes around. When you choose to do good in your community, you are building a good reputation around your brand. Consumers are more likely to stick with companies they feel are in alignment with their own values. By servicing others, people will remember your brand as a socially responsible and respectable company. Additionally, finding ways to support efforts that align with your company’s mission helps build credibility. Create Networking Opportunities: Getting involved with your community provides opportunities to meet other like-minded community leaders and individuals. It’s also a great way to spread the word about your company and draw awareness around your brand. Understand Your Audience: [...]

1 05, 2019

Save Your Business Money by Going Green

By |2019-04-24T18:23:09+00:00May 1st, 2019|Uncategorized|0 Comments

Discussion over climate change has increasingly turned people’s attention towards the environment. As society continues the green movement trend, consumers are willing to spend even more money on products that are in line with their values. People participate in sustainable practices like recycling, driving electric cars, shopping with reusable bags, and replacing old household utilities with low powered products – and companies are not far behind. Innovative companies are following the public tide and incorporating sustainable practices into their businesses for multiple reasons. Not only are these companies appealing to consumers, but they are also visibly saving their business money. Here is how building a sustainable business will not only save the planet but save your business money: Energy-Efficient Utilities: Save money and electricity by replacing the light bulbs in your office with ones that are energy-efficient. The next time you are looking to purchase new office equipment, keep an eye out for office products with the Energy Star Certification. Many computers, phones, and other equipment with this symbol can save your business energy and money in the long run. [...]

15 04, 2019

Small Business Financing and AI Technology

By |2019-03-25T18:25:47+00:00April 15th, 2019|Uncategorized|0 Comments

As technology continues to evolve at a rapid pace, many working professionals are turning towards the newest technological trends to capitalize on time, money, and improve the quality of their work. One current technological trend that is a popular topic of discussion includes artificial intelligence. There has been a lot of excitement among a variety of fields around the topic of AI as a useful tool. From agriculture to construction, to education and engineering, many professional fields are introducing and utilizing AI technology to their advantage. AI technology has the potential to produce positive implications among many fields of work, including small business financing.  Artificial intelligence is technology that can use independent reasoning to complete a task. Hence, AI can complete tasks more accurately and timely as compared to someone manually doing a task. In relation to business financing, AI is capable of predicting unexpected dips in cash flow based on a business’s past cash flow trends. It can also help you analyze real-time data sets and offer a better financial picture of your business’s financial health. This can help small business owners make smarter financial [...]

1 04, 2019

Income Tax Tips for New Business Owners

By |2019-03-25T18:21:11+00:00April 1st, 2019|Uncategorized|0 Comments

Starting a new business venture brings excitement, but can also be equally overwhelming. Between taking out loans, creating an effective branding strategy, and acquiring new hires, accounting for tax liabilities may be a lower priority on your immediate list of to-dos. Still, it is important to consider the implications of your tax responsibilities in order to stay in line with IRS requirements and stay informed about maximizing deductions and preventing liability issues in the future. The following are a few things small business should know about federal income taxes.  Different legal entities have different impacts on your taxes. Your tax liability can vary greatly depending on the type of legal entity you choose. Whether you have a sole proprietorship, LLC, S corporation or partnership, each business type has different benefits and limitations. Learn more about the different types of business structures in our blog. Depending on your business structure, you may be subject to higher corporate rates, or in the case of small business owners, you may have the advantage of paying taxes at the shareholder level. It is important to look into the types of [...]

15 03, 2019

How to Adjust Journal Entries

By |2019-02-25T21:48:54+00:00March 15th, 2019|Uncategorized|0 Comments

As a business owner, you want to know exactly when your revenues and expenses occur to keep your records accurate. But often times, recording transactions under the cash method of accounting doesn’t give you an accurate picture of the inflow and outflow of cash. For example, if you bill a client for services within the current month, the payment is expected to be received next month. Even though you will receive the money next month, it would still be recorded as this month’s revenue. Therefore, the outflow and inflow of cash do not always reflect real-time cash exchanges. Adjusting Entries By adjusting entries, you can record expenses and revenues as they occur rather than waiting for the real-time cash transaction. The following are factors that require adjusting entries to accurately reflect your cash flow. Accrued expenses – Expenses that you’ve accrued but have haven’t paid yet. They usually appear as accounts payable liabilities. Deferred expenses – Expenses you’ve already paid but have not consumed yet. Deferred expenses appear on the balance sheet as assets. Accrued revenues – These are revenues [...]

1 03, 2019

Evaluating Your Business’s Financial Health

By |2019-02-25T21:36:36+00:00March 1st, 2019|Uncategorized|0 Comments

Are you aware of how much money your business is making and spending? A good indication to your business’s health is knowing the hard numbers that your business is worth. If you want your company to maximize its profit, it is important to set systems in place to control expenses and stay updated about your company’s finances. The following are a few ways you can track your revenues and expenses. Chart of Accounts – Review your chart of accounts to track transactions, expenses, and profitability. Automate Income and Expense Tracking – Utilize accounting software to link your bank account and credit card activity with your accounting records. All of your business activity will be recorded for the month without the hassle of manually entering in transactions. Accrual Accounting – Accrual accounting is useful for tracking when profit is earned and when expenses occur, rather than cash basis accounting which tracks money based on inflows and outflows. Accrual accounting gives you a better picture of where your money is, whereas cash basis accounting can be misleading, especially if money is owed [...]

15 02, 2019

Ways to Track the Money in Your Business

By |2019-02-01T23:25:34+00:00February 15th, 2019|Uncategorized|0 Comments

As a business owner, you work hard to increase the money in your company. But how do you keep track of where the money is going? In order to maximize the income your business generates, it is important to track the whereabouts of your company’s money to prevent the chances of undetectable leaks or money losses. Poor tracking habits can lead to unnecessary expenses, wasted money, or even theft. The following are a few ways to eliminate the risk of money leaks and maximize revenues! Cost of Sales - All changes in cost of sales and inventory costs should be tracked carefully. Too little inventory will leave customers dissatisfied, and too much inventory could result in wasted cash investments sitting untouched. Payroll – Your employees make up a portion of your expenses. The total cost of labor needs to be tracked, including taxes, benefits, vacation time and other perks. Small business risk making errors when reporting is done inside the company. To avoid detrimental errors, small businesses should outsource payroll services instead. Client Billing – Accuracy and timing are key in client [...]

1 02, 2019

Rules for Keeping Petty Cash in the Office

By |2019-02-01T23:18:36+00:00February 1st, 2019|Uncategorized|0 Comments

Keeping cash in the office can be a convenient, quick way for your employees to get supplies needed for the office or handle small, occasional expenses that crop up. Although keeping petty cash in the office can be beneficial, having cash that is easily accessible will also increase the likelihood money will be abused or stolen. Here are a few dos and don’ts you should know when using petty cash in the office. Establish a dollar limit for the petty cash fund – Keep enough cash to cover occasional funds, but don’t keep too much in the office. Having a large, accessible amount might encourage employees to steal it. Consider allotting a petty cash fund between $50 to $200 for the month. Clarify what expenses the petty cash can be used for – Make sure your employees understand that the money is designated for business-related expenses only. You can write down specific examples such as coffee, paper towels, or other office supplies. Create a log to account for expenses – This is to make sure the money is properly accounted [...]