As a small business owner, your taxes won't get taken out of your paycheck. If your business owes more than $1000 at tax season, the IRS will require you to pay them by making quarterly tax payments. You pay the IRS and your state government taxes four times per year, based on your estimated annual tax. If you pay these taxes late, you'll incur penalty fees. Your state also requires similar quarterly payments, unless you live in a state without state taxes.
For accuracy that leads to financial savings, one of the best decisions your company can make is to outsource the company's back office. An outside team not only helps your finances through reducing expenses and fees at tax time, it saves you all year round. For most small business and entrepreneurs, the day-to-day expenses of hiring an employee are far greater than contracting with another business.
These are four ways using an outsourced company will reduce your company's operating costs:
It's time for a new year, the perfect opportunity to make changes in your business that will help it succeed. If you're a newer or relatively small business, there's a good chance you don't have an expert bookkeeper on your team. If it isn't right at this time for your team to hire a permanent back-end bookkeeper, outsourcing these tasks is a wonderful solution.
Here are three reasons to seriously consider outsourcing these tasks this year:
When you're starting to hire employees as an entrepreneur or small business owner, you may be uncertain how to compensate your employees. Most likely, you've done your research and decided on a ballpark figure of what you'd like to pay each employee, but you may be getting bogged down in different employee classifications. You can make your employees non-exempt or exempt. We'll define each of these terms for you, and how it impacts employee payment.
These employees are classified as nonexempt because they aren't exempt from the Fair Standards Labor Act. In all states, this means your employee is entitled to overtime pay at 1 1/2 times their hourly wage if they work over 40 hours a week. Additional rules apply in certain states, and generally speaking these employees are entitled to a break after a certain number of hours working.
If you hire non-exempt employees, be certain to carefully calculate their overtime pay to avoid running into legal difficulties. You'll also need to keep in mind that it's usually illegal to compensate for overtime with comp time instead of additional pay.
It's closing time on the last day of a long string of seemingly endless busy days. The last customer walks out the door. As the lock clicks behind them, there is a collective sigh of relief. Another great holiday season is wrapped up (pun intended) and high-fives abound!
As wonderful as that is, the work for an owner/manager is far from done. Now is the time to begin planning how to make next season just as spectacular. With so many things yet to be done, there are certain priority items that need to be checked off the list before you start right in on the next go 'round. Listed below are 3 top items to invest in after the busy season.
Many seasonal businesses are now entering their busiest seasons. While that's great for your current income, it's also critical that you manage income effectively in order to ensure your cash flow for the entire calendar year. If you're struggling with managing a seasonal business, these tips will help.
1. Prepare Your Budget Early
When you run a seasonal business, you need to create a budget forecast for a year at a time. Then, during your busy season, you'll know how much money you can reasonably allocate to incidental expenses and how much money you need to set aside for expenses that may come up during the rest of the year. Be clear about what things really cost during the off season, whether you're dealing with a store that you shut down when the holidays are over or a rented storage space for unsold merchandise.
Every business must cope with the issue of keeping track of the budget and money flow both in and out of the company. The best way to handle what can sometimes be a complex, time-consuming job is with a good accounting software, but the options seem endless and the variety of software is astounding. So how can you choose the accounting software to best fit the needs of your business? Here are some tips to get you started.
1. Set a budget
Before you even begin to look at accounting software options, you need to set a budget. Available software ranges in price from less than $100 to more than $1000. You’ll need to decide what your business can afford. If you own a small business, for example, you may be fine with a less expensive option, but if you have a large business with a large amount of accounting needs, you’ll want to budget more. Do not simply go with the least expensive option, but do know your limits.
Wouldn't it be nice to simplify the back-office so other parts of the business can be focused on? Small business owners may find themselves in between hiring a comprehensive CPA service and using their own unique systems, neither fitting their businesses' needs very well. Really, saving time is the same as saving money, and making workflow processes easier saves time and energy. This is how cloud-based accounting software simplifies the back office.
Starting an online business can lead to a successful and rewarding career. With some advanced preparation, you can increase the odds of success.
Here are our 6 steps for starting an online business:
Identify and research - This is the most important part of your journey. Identify your interests and what type of business you want to run. Research your ideas and see what already exists on the internet. Are there already businesses out there competing for customers or will your business fill a unique niche? Take inspiration from what others are doing. Then improve on those ideas and make it your own.
As a business owner, you might always be looking for jobs that you can handle yourself. Doing so allows you to be more involved with your business and you may be worried about paying for services. However, even though it might seem like an appealing option, the truth is that you are typically much better off hiring a professional.
These are a few reasons why you should not attempt to DIY your bookkeeping, no matter how small your business is:
Any good entrepreneur knows the importance of cash flow. Having to front costs for a project while waiting for a customer to pay can be painful, like the blood of your company is being drained. Solidifying a payment system protects you and the customer. You don’t want to be the nag always asking for payment, so instead use new tech to your advantage.
Here are our 3 tips for getting your invoices paid on time:
You've done it! You've set out on your own and now you get to make all the decisions. Maybe you’re learning that decision making is tough, and you’re feeling overwhelmed. You may need to bring in some help, and we think a bookkeeper can be one of your most valuable assets as a business.
Here are 5 reasons you should seriously consider adding a bookkeeper to your business:
Peace of Mind. Financial and tax issues can kill your business before you get the opportunity to reap the benefits of all your hard work. Hiring a bookkeeper can give you the peace of mind that your finances are handled correctly and ready for tax time. You can focus on your area of expertise, while they focus on theirs.
A lot of people who aren't "numbers people" group people who work with numbers and data into the same category. This post will explain the differences between an accountant and a bookkeeper so you can understand why your CPA should never be your bookkeeper (and vice-versa).
The best way to explain is to tell you what a bookkeeper does and what a CPA does:
What a bookkeeper does
Let's start with the background of a bookkeeper. Many bookkeepers get started as data entry clerks, which is an entry-level position that doesn't require a college degree (in most companies). With experience, they can move into the role of bookkeeper, and eventually, if they want, they can obtain certification and/or higher education to move into an accounting role.
Outsourcing services - we all have an opinion on it. Whether you have extensive knowledge on the subject or are beginning to research this important business strategy, the resulting decision is crucial to your year-end balance sheet.
As a business owner, it is hard to release control of any part of your business to someone else. Before you make a snap judgement, consider the advantages of giving the responsibility to someone else to increase your profits.
Here’s why outsourcing will increase your profits:
Building a business means executing your business plan and reviewing all options for cost savings. Outsourcing will increase your profits by reducing your responsibility, stress and business expenses.
To talk more about this, or if you have any questions, contact us! We’d love to help.
Our quick infographic shows you the benefits of outsourcing your bookkeeping vs hiring an in-house bookkeeper. Click here for a larger, printable version.