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21 10, 2019

Tips on How to Get Your Invoices Paid Faster

By |2019-10-01T17:02:44+00:00October 21st, 2019|Uncategorized|0 Comments

Having a steady income is pertinent in running a successful business. With that being said, no business owner enjoys a late payment. Late payments not only set you back when managing your business’ finances, but they can also compromise business relationships. The following tips can help you avoid late payments and encourage your clients to pay their invoices faster. Be polite. Phrases such as “please pay within” and “thank you for your business” can make a difference. Studies show that changing the tone and language of your invoices can help you get paid faster. Specify the terms. Provide a clear, specific time frame such as ’30 days’ to avoid misunderstandings. Make sure you properly format your invoices, provide accurate information, and include all the details your client will need. Set a routine. Sending out invoices at a set time can help your clients get in the swing of your routine. This can help them expect when to receive your invoices and plan when to pay. It also helps to send invoices promptly after completing your service. Hold off work. If [...]

14 10, 2019

Understanding Full Cycle Accounting

By |2019-10-01T16:55:43+00:00October 14th, 2019|Uncategorized|0 Comments

The term “full cycle” can be applied to different aspects of accounting. Full cycle accounting can refer to the processes in place to produce financial statements within a reporting period, the cycles of accounting positions, or refer to the business cycle of a company. The following points explain the concept of full cycle as an interchangeable term within accounting. In a reporting period, full cycle accounting is comprised of all the activities that an accountant undertakes to produce financial statements within that period. These activities may include recording business transactions, adjusting entries, producing financial statements, and closing books. Full cycle accounting also refers to the complete set of transactions that is associated with a specific business activity. These activities can include sales, purchasing, and payroll. In sales, the full cycle of activities includes the process of buying goods, storing goods, processing customer orders, picking items from stock, selling them, and collecting payments. In purchasing, one submits a requisition for goods, issues a purchase order, receives the goods, and processes the payment. In payroll, the full cycle comprises of employees submitting [...]

13 09, 2019

Accounting Basics

By |2019-09-12T23:20:36+00:00September 13th, 2019|Uncategorized|0 Comments

Learning how to record and report business transactions is an essential skill when running a business. With accurate financial information, you can better assess the financial health of your company to make smarter financial decisions, take calculated risks, identify unnecessary costs, and even save your company money. The following terms and tips will give you insight into the basics of accounting. Create a System of Record Keeping Set up accounts in which information can be stored. Accounts can be categorized as the following: Assets – these are the resources or items of value that are owned by your business, such as accounts receivable and inventory. Liabilities – these are debts or transactions to be paid by your business, such as accounts payable and loans payable. Equity – this is the difference between assets and liabilities Revenue – this is your company’s earnings in the form of billed amounts to customers in exchange for your goods or services. Expenses – this is your company’s costs or money spent to generate revenues, such as rent expenses and employee wages. Record Transactions Individual [...]

12 09, 2019

Equations Business Owners Should Know

By |2019-09-12T23:35:33+00:00September 12th, 2019|Uncategorized|0 Comments

Running a full-scale business comes with various daily duties as well as long-term responsibilities. Of course, outsourcing a few business responsibilities, such as accounting, can give you more time to prioritize other business tasks. But as a business owner, you should know basic accounting equations in order to have a greater understanding of your company’s financial position. Here are a few equations that every business owner should know: Total Assets = Liabilities + Equity This formula can be referred to as your basic accounting equation. Assets are all things of value that your company owns, such as property, cash, accounts receivable, or inventory that provide your business benefit. Liabilities are defined as your company’s debts. This can include rent, account fees, or accounts payable. Finally, equity is the portion of the company that belongs to the owner. Net Income = Revenue – Expenses Your revenue is the profit your company gains through sales or other positive cash inflow. Expenses are your company’s costs. Expenses subtracted from your revenue can show you how much you have earned and calculate your net [...]

15 08, 2019

Beginner’s Guide to Freelance Accounting

By |2019-07-25T19:05:20+00:00August 15th, 2019|Uncategorized|0 Comments

Because of the flexibility that freelance work offers, some people are drawn towards freelance work or self-employment for the freedom of choosing their own work hours, clientele, and individual work processes. Transitioning to freelance work has its advantages but also presents new challenges and responsibilities, especially when considering taxes.  In the case of traditional employment, taxes are automatically withdrawn from one’s paycheck. But as a freelancer or self-employed person, you are held accountable for estimating your own tax payments every quarter rather than relying on your employer. Keeping accurate, detailed books are also imperative to building a successful and profitable business. Here are some basic tips one should know before entertaining freelance work or self-employment. Keeping Track of Essential Financial Documents In order to keep up with tax estimation, it is important to keep forms such as Form W-9, Schedule C (Form 1040), Schedule SE (Form 1040), Form 1040-ES, and 1099 forms. Such forms are required for a variety of things, from identifying your taxpayer identification number, reporting profits and losses, figuring self-employment taxes, estimating quarterly income taxes, and more. [...]

1 08, 2019

Things to Know Before Starting Your Business

By |2019-07-25T19:00:05+00:00August 1st, 2019|Uncategorized|0 Comments

So you’re entertaining the idea of opening a business, but where do you start? Launching a business can be intimidating. But with the right tools, dedication, and a strong plan, anyone can pursue a business. The following tips provide a light guide to help you pursue your business plan. Evaluate Your Circumstance Start by considering your current situation and evaluating your current strengths, skills, resources, passion, and life goals. The more these concepts align with your business idea, the more it indicates you have a good foundation for your business.  Brainstorm Your Business Idea Combine your strengths and passion with foresight. Consider where the future is going; are there technologies or trends that are on the rise? Do your research and assess potential competitors to come up with a unique business plan. It also helps to seek guidance or advice from other entrepreneurs or others from your networking group to bounce off ideas or get feedback.  Execute Your Business Plan Begin by writing a concise business plan which includes your business’ name, a description of your company and plan for [...]

15 07, 2019

How Does a Home Remodel Affect my Taxes?

By |2019-06-25T23:31:58+00:00July 15th, 2019|Uncategorized|0 Comments

It’s summer, the perfect time of year to execute the remodeling plans you’ve had all year long. Remodeling a home is exciting, and while you are mainly focused on the mechanics of transforming your home, you might not have considered how a remodel can impact your taxes. Many people are unaware that certain improvements or elements of a home renovation can influence and occasionally minimize taxes. The following are a few ways in which your home renovation can play into your taxes: Energy Tax Credits Going green not only serves the environment but can also bring you more money. Consider adding solar energy panels to your home; installing solar panels can reduce energy costs and save you from paying high electric bills. If the panels are placed in service by the end of 2019, you are eligible for a solar-electric tax credit of 30%. Under certain conditions, solar water-heating systems, fuel cells, wind-energy systems, and geothermal heat pumps can also qualify for the credit. Medical Related Renovations If someone in your home is confined to a wheelchair, the cost of [...]

1 07, 2019

Benefits of Saving as a Recent Graduate

By |2019-06-25T23:20:35+00:00July 1st, 2019|Uncategorized|0 Comments

As a recent graduate, you may be focusing your sights on the future, whether it’s planning for further education, jump starting your career, or traveling. However you decide to enjoy your freedom, it’s important to start considering your future finances. Although finances may not be an immediate concern, planning for the future and saving early can significantly increase your opportunity for financial freedom later. The following points are reasons you should start saving as a young adult: Establish good habits As you continuously start to save, you are establishing a beneficial habit. Setting aside money may seem like a chore, but as it becomes habitual you will start to see the growth and the long-term benefits of saving. Take advantage of the time value of money Investing your money can also be a form of savings. When you invest, you can earn more money from the money you put away as time progresses. Depending on your annual return, you can earn a significant amount. Say you invest $500 per month with an annual return of 7%. Your account will be [...]

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 [...]