The traditional bookkeeping is no longer feasible an age where the sheer volume of financial transactions, even for small businesses, beggars belief. Individuals and businesses are constantly driving for efficiency and a competitive edge. That often involves automating a large part of some pretty routine business tasks.
My mate Alan from Painters Toowoomba told me about getting an accounting software but I never listened. A few weeks ago I realised the lifesaver these digital tools can be. I wanted to give him a shout out and also acknowledge his efforts against my hard stubbornness.
Using an accounting software really aids in your bid for efficiency. It makes the task of bookkeeping less cumbersome and saves you lots of time. It simplifies your tax filings and tax reporting requirements and ensures your financial affairs proceed as smoothly as possible. The best part is that you don’t have to be a financial expert to use an accounting software. The ease and simplicity of use has helped many businesses save lots of money on their bookkeeping costs. If you are still contemplating implementing an accounting software solution in your financial affairs, here are top five benefits that you will derive from taking that much-needed plunge.
Drastically Cut Down on Accounting Mistakes
One of the biggest weaknesses with manual bookkeeping is the sheer number of accounting mistakes that you find yourself making. Manual accounting work will exponentially increase the instances of errors during the data collection as well as calculation.
Using accounting software will minimize these errors and even eliminate them altogether. Accurate accounting is good for your financial projections and tax reporting. The accounting software automatically does all the calculations with a higher degree of accuracy and the human error factor is eliminated from the equation.
If you are running a busy concern with a high volume of invoicing, the importance of accounting software will become even more apparent. If you have to handle a large number of detailed invoices that include specific items and the billing of worked hours at varied rates, you can do so with accounting software without much strain. The software simplifies the work involved and the accuracy of the accounting process.
Efficient Financial Monitoring
Accounting software offers you real-time financial reporting. This is a world away from the manual accounting where the only opportunity you get to have a big picture view of your finances is usually at the end of the financial year. With an accounting software solution, you can perform the monitoring continuously and at any time you wish to. This allows you to make interventions on your finances long before they grow into a more debilitating financial quagmire.
Cash Flow Management
With accounting software, you can capture the receivables and payables more accurately. Your accounting solution can use this data to project the cash flow position of your business into the future. By capturing all the records of your bills and invoices, the accounting software can therefore be used as an effective forward planning tool that will help you navigate around the shark waters of never-ending financial obligations. For example, it can be effective in helping you avoid the late fees and overdraft charges.
The real-time insights from accounting software allow for a higher standard of financial transparency in the business matters. Most of the accounting software solutions feature a live dashboard that gives you a simple visibility of the important business information. This kind of transparency is quite crucial to the running of your business and enables you to make better decisions on the direction of your business.
Features and functions such as real-time data make it easier for the software to compute all the key insights ranging from cash flow forecasting to asset management.
Short Learning Curve
Accounting software tools are getting simpler by the day. It is easier to master them than it is to master basic accounting concepts. If you are a small business owner without an accounting background, you can easily use these accounting software tools to effectively manage your finances.
You can learn to use them easily and start minimizing the accounting errors in your business that are eating into your margins. Besides, most accounting software tools also come with professional customer support and training to help you get on board as quickly as possible.
The conventional manual bookkeeping is not only complex and cumbersome but also very time-consuming. Doing your accounting manually consumes a lot of time. Not so with accounting software tools. These will drastically cut down on the time required to perform your accounting. The system will record all your financial transactions thereby saving you the time you’d spend to do all of this manually.
Thinking of achieving your long-term financial dreams, supporting the growth of local businesses, like Plasterer Central Coast; fulfilling your personal ambition to become an entrepreneur, or protecting existing jobs and creating new ones, an investment portfolio can help you achieve all these. Above all, making investments help you develop your capital over time. A common myth about investment is that huge amount of capital is required to get started. This is not so, the process of developing a firm investment portfolio can begin with a few hundred or thousand dollars. Whether you are thinking about investing a little or a huge amount of money, what you need to consider is the risk associated with investment of any kind.
In this article, we’ll be analyzing the best investments to make in the year 2020. But before we dive into all the details of the best investments, there are two important things to take note. The first one is to create a largely varied portfolio which can lower your risk of loss. The second thing is to make and stick to an automatic, long-term investment plan.
Here are the best investments for the year 2020
Stock Market Investment
The stock market has been generating remarkable return on investments over the years. Investing in the stock market is an excellent way to grow your money. Stock market investment are a good investment for long-term investors even during the periods when the market is volatile. Below are some of the best stock market investments to make in 2020:
- Amazon.com (NASDAQ:FB)
- Facebook (NASDAQ:FB)
- General Motors Company (NYSE:F)
- The Vanguard Total Stock Market ETF (NYSEMKT:VTI)
Some investors are trying to invest in particular industries since the stock market keep trending upward. There are a number of specific industries. The following are the best industries for investors to make their investment in 2020:
- Real Estate Investment: Over the years, real estate has proven to be one of the best industries for investors to invest their money. This is so because housing prices continue to increase with no end in view. If you wish to invest in real estate, but you don’t want to use your life savings, one of the best ways to go about it is to make your investment through real estate investment trusts (REITs). From investing in flipping property to participating in real estate crowdfunding, real estate investors have many preferences when it comes to investing in real estate.
- Biotechnology: Investors who have interest in the life sciences are conscious of the importance of biotech and biotechnology companies in this area of investment. This industry is focused on the use of living organisms to create commercial products. In simpler terms, the biotechnology industry is concerned with the production of commercial products for its main industries.
The main method of investing in this sector is through stocks. It is important for investors of this industry to realize that there is a difference between pharmacological companies and biotechnology companies, and also, investors must decide on the level of risk. Because of the rate at which this industry is growing over the years, it is considered as one of the best sectors to invest in 2020.
- The technology industry: This sector consist of businesses that sells products in electronics, computers, artificial intelligence, and other IT-related industries. The technology is the largest solitary piece of the market, muddling all other sectors, including the financial sector, making it an unavoidably massive investment opportunity for investors who are planning to invest in 2020. The companies in this sector are concerned with invention and innovation.
Above all, investing can be a great way to build your wealth and becoming financially free. Investors have a range of investment options, ranging from the safe ones with lower ROI to the more risky ones with higher ROI. What this range mean is that you as an investor need to have a clear understanding of the pros and cons of each investment option so as to make a great decision, as it is required of every investor to handle investments with extreme caution.
Are you a tax season procrastinator or you don’t just know how to organize your tax information for the tax season? In this article, we are going to walk you through the process of how to organize your tax documents for tax time.
To start with, what do we mean by tax time? Tax time is the season or time when distinct taxpayers habitually arrange financial statements and reports for the previous year and submit their tax returns. Tax return, on the other hand, is a practice whereby business owners file for all the taxes they are liable to pay. The tax return also allows business owners to calculate tax payments and tax-liability.
During the tax season, businesses must equip their employees, and other fee earners, with tax documents identifying the data required to complete the tax return of each individual.
What are the Documents You Should Save for Tax Time?
Knowing the exact documents you need to have at your fingertips can help you ease the difficulties of organizing your information for tax time.
The list of documents you should save is not meant to be a meticulous list. The list include; Several kinds of forms with purposes ranging from self-employment to dividends, tuition statements, documents related to a life event (such as a divorce, marriage, or child birth), mortgage interest statement. Also, there is a need to trail paperless archives as they come. Your online banking statements often contain vital standby records for prospective inferences such as; Outlays for health care, property tax expenditures (you can include your car if you have one), charitable donations and many more.
Below are the tips you can use to simply organize your tax information.
Create a centralized system for your tax documents
Designating a place which is easy to access for your tax documents is the first step to take when organizing your tax information. This method might sound complicated, but it is a very simple approach.
It is always easier to receive, open, and process income, salary and investment documents when you have a centralized system.
Group your tax documents by category
The second step to take when organizing your tax documents is to group them. You may want to categorize them into boxes, file folders, paper clips or other methods that can be used to categorize documents. This categorization depends on the intricacy of your tax return. Also, if you have one or more businesses, there is a need to keep each business document separate.
Find the previous year’s tax return
The previous year’s return is a great starting point for filing the current year’s tax return. Information can be seen by looking at your return for the previous year. In addition to the above, there might be a need to make use of some pieces of information such as the account or reduction information to complete the current year’s return.
Keep this document for as long as you can
The common question business owners ask is “for how long should I keep these documents?” The IRS’s standard period of limitations to assess additional tax is three years. Nevertheless, there are certain circumstances that require you keep these documents for a longer time.
In conclusion, although the process of organizing your information for tax time may seem overwhelming, but if you spend a little of your time now organizing your tax information for tax time, preparing your return will be an instant accomplishment. However, if you keep and organize your tax documents throughout the year, completing your tax return would be much easier, faster and convenient.
Being a sole-trader means you are the exclusive owner of a business, and you have complete responsibility for every aspect of that business, finances included. Being a sole-trader is very tasking, and a lot of small business owners lose their businesses due to improper financial management. To avoid the challenges faced by sole-traders, you need to hire an accountant at different stages of your company’s growth.
Hiring an accountant to manage your business finances can be a know-how step to take whether you are just starting out, or you are up and running but looking to expand. Here are some varied reasons why you, as a sole-trader, need to hire a bookkeeper who will help your business develop.
It would help if you had advice about the legal structure of your business
Accountants aren’t there just to help with finances alone, they can also support by advising you about the legal structure of your business, as it is evident that not all businesses have the same legal structure. With the help of an accountant, you should carefully consider each type of structure before making your decision on the one that best suits your business. For example, you as a sole-trader, the exclusive owner of your business, and also invoicing under your own name, you might be able to counterbalance some of your living expenses against tax.
Minimizing tax liability
The amount of money you spend on tax depends on the amount of profit your business makes. It is evident that you as a sole-trader wants to make profit and keep hold of as much of the profit you make as possible so as to grow your business by reinvesting back in the business. Sole-traders need an accountant to make this possible and stay on top of all the changes in tax rules.
Full account management
As a sole-trader, you can transfer your account’s full management to your accountant, even though you’ll still be lawfully liable for their accuracy. What this mean is that they will be able to make use of their skills and expertise to manage your account on your behalf.
Saves you time
Accounting tasks consist of simple duties such as bookkeeping, tax returns, recording receipts and setting financial targets. These tasks are vital to business success and solidity, but they also take a lot of time. When you hire an accountant to manage your business finances, he/she saves you time by doing all the work needed to file your tax returns. Majority of sole-traders start their businesses doing what they love to do.
Accountants can help you center your business energies on the important things, which is predominantly money-making, while they take care of the other important things for you.
Could save you money
You might think that hiring an accountant is quite expensive, but the truth of the matter is that it is worth it. When you hire a good accountant, he/she will be able to point out any possible area where you can save money.
Should I hire an accountant?
At the end of it all, the answer to this question is determined by on your personal choice. Having discussed the reasons why you, as a sole-trader, need an accountant, the summary of it all is that it makes life easier. Hiring an accountant would be an excellent move to ease off the headache that comes with handling the financials of your business. Not only will an accountant keep your accounts in order, but they will also help foster the growth of your business.
For many businesses, be it a small business or a large firm, finding an accountant is essential and a bit overwhelming at the same, considering the fact that most accountants are members of related professional groups. As a business owner who is ready to hire a tax accountant, you want someone who can provide useful information for your business aside helping you save money and avoiding potential trouble with IRS (Internal Revenue Service).
We tend to think of accountants as people who deal with numbers, but a good accountant does more than figuring the numbers, a good accountant will figure the numbers and communicate what the numbers mean to us. Before you hire him/her, get to know the person you will be working with by asking the right questions. It will give you lots of credible information about this particular accounting and tax professional, to figure out which one is the best fit for you and your business.
To make things a bit easier, here are six questions you should ask before hiring an accountant:
What Areas Do You Specialize In?
This is a good question to ask an accountant before hiring him/her. Just like other fields, most accountants have areas they specialize in. Whether it is environmental accounting, personal financial planning, auditing information technology, or making payroll easier, you need to find out what the accountant you’re about to hire really likes working on, and whether that area of specialization is vital to your business.
Do You Have Experience With My Kind of Business?
Another good question s to ask about their experience with your type of business. Having an accountant that understands and has experience in your field is very helpful, as all business types are not handled the same way from a tax and accounting perspective.
An accountant who has experience with your kind of business will have an easier time understanding what your needs are, and also expect the types of challenges you’re likely to face so you can prepare ahead.
To make things a bit easier, here are six questions you should ask before hiring an accountant:
How do you like to work?
This particular question is probably one of the most important questions to ask an accountant you intend to hire. This is because you need to know whether your candidate’s personalities and working style fit in your requirements aside from his/her qualifications, competence and professionalism.
Why should I hire you as my accountant?
When you ask your potential accountant this question, you should be expecting a brave and rational answer. The work of your accountant is to employ all legal means to minimize your tax exposure and in turn, improve the company. If the potential accountant is unable to provide a valid reason why you should hire them, perhaps you should not.
How do you bill for your services?
This question is different from, “How much do you charge for your services?” though you must ultimately ask that question also. You need to know the billing model of your prospective accountant, as this will help ensure your outlooks make even with that of your accountant.
What else do I need to know about working with you?
This question, when asked allows the accountant to address anything they believe, is essential to address. The question, on the other hand, gives you a chance to know their behaviour and openness.
Choosing the right accountant for your business is a crucial step to take. These six questions will, without any doubt, make the screening process a bit easier for you. You may work with your accountant for many years, so it’s well worth a little of your time and effort to ensure you hire the candidate that best suit your needs.