Entrepreneurs thrive on a DIY mentality: Do everything you can yourself and don't pay for anything new until you have absolutely have to. It's especially difficult to hire financial help like a bookkeeper.
With user-friendly software such as QuickBooks available, many business owners feel they should be able to do keep their records on their own, even as they wrestle with finding the time and wonder if they're doing things correctly.
Deciding about "hiring a bookkeeper is something I struggle with all the time," is a quote stated by over 70% of business owners nationwide according to National Association of Certified Bookkeepers. While basic accounting easy to do, it takes focus away from working on the business. It is also a fact that bookkeeping and accounting become more complex and difficult as your business progresses year after year.
Entrepreneurs who hire bookkeeping and accounting help usually discover they weren't doing nearly as well on their own as they thought they were.
Professional bookkeeping will clean up records that incorrectly mingle expenses and assets, review employee purchases for duplications, and take over the mundane but critical task of paying bills. Estimates vary however, studies have found companies save $500 to $1,000 in various fees etc. every quarter. So what are a small-business owner's options for professional help with financial tasks?
Do I Need a Bookkeeper or an Accountant?
Actually it's a trick question. You may need both.
An accountant can analyze the big picture of your financial situation and offer strategic advice. He or she produces key financial documents, such as a profit-and-loss statement, if needed, and files a company's taxes.
After tax season is over, an accountant can also act as an outsourced chief financial officer, advising an entrepreneur on financial strategies, such as whether to secure a line of credit against receivables when introducing new products.
In contrast, a bookkeeper does the day-to-day hands-on tasks: making sure new employees file all the right paperwork for the company's payroll, submitting invoices (promptly) and following up on them, and paying the bills. The bookkeeper also tracks company expenses and can assure that every cost has been entered -- and recorded correctly -- into software like QuickBooks so that the business is ready for tax time along with filing any other reporting to, say, creditors or investors.
If you don't have a bookkeeper, you're probably not being as strategic as you could be in how you spend your money.
urBook$ can take on the role of your bookkeeper and free up your time to focus on your passion, THE BUSINESS YOU CREATED! Call urBook$ today 469.304.0036 to begin your journey of experiencing the urBook$ difference today!
The end of the calendar year means a lot of things for small businesses. It's time to start thinking about what you want to achieve next year and work on your formal goal setting process. Your are probably in the midst of holiday shopping for your employees, vendors, clients and colleagues. And, of course, it's time to start closing out 'urBook$' for this calendar year.
In fact, right now is the time to check-in with your accountant to see if there is anything you should be doing to make sure your business ends the year fiscally healthy. A few small changes can make a big difference in your total income and tax liability for the year. Our goal at urBook$ is to ensure our client's have every resource to make prudent financial decision and set achievable goals.
To get you started, here are a few important year-end tax preparation steps you can take in order to close out the year financially and take advantage of additional deductions:
How was your year financially? This info is vital for your goal setting process and to ensure your books are up-to-date and accurate. Have your bookkeeper or accountant run all of the reports that are relevant for your business and schedule a time to walk through them together if you need more explanation on the numbers and specific breakdowns.
Any income received by December 31 counts as income for the current year. Shifting income to after January 1 delays it from being counted as income until the following year, and this can save you a significant amount of money, depending where you income levels are each year. So ask your accountant if it makes sense to defer December payments until January to cut your tax bill.
Now is the time to spend money on items your business needs so you can maximize deductions. Does your equipment need to be upgraded? Can you stock up on office supplies? Are there vendor payments you can make in advance? Make a list of purchases you can make now to get the most out of your deductions.
If there has been a drop in market value of your inventory, you may be able to claim additional deductions. This depends on your accounting methods, so make sure you check with your accountant to see if this makes sense for your small business.
Make payments to your retirement plan or set one up before December 31 to reduce your income for this year. Now is the time to max out your contributions. If you haven't yet set up a retirement account, talk to a financial advisor to determine which plan is best for your business.
Not only is making a charitable contribution from your small business a great thing to do during the holiday season, but it can also be a good idea for your business finances. And you don't have to donate money. You can also donate items such as clothing, toys and other goods, and claim a deduction for the fair market value. Just be sure to get proper documentation and a receipt for your records.
Remember the slight panic that set in when you started thinking about closing out your books, digging for the data your accountant or bookkeeper asked for and through about your business finances as a whole? Get a jump on next year now by outlining a system you can use to make the process even smoother next year. Getting organized now will make next year a breeze!
**Tips provided by www.sec.gov/smallbus - urBook$ can only suggest ideas to generalized end of year preparations. For more information, geared towards your business contact urbooksplano.com at 469.304.0036 for your consultation.**