What Can I Do with Monthly Financial Statements?Posted on December 16th, 2017
As a business owner, you understand that financial transactions have to be recorded. Every time you pay a supplier, purchase equipment, or make a sale, that is marked in your general ledger. But this data isn’t just a collection of numbers – it can provide real insight into your business’ financial health when utilized in routine reporting.
When monthly financial statements are generated, business owners are better able to do all of the following:
Obtain a Clear Picture of Assets – If you’re looking to secure a loan for your small business, or present financial data to potential investors, it’s vital to have a clear understanding of your company’s value and assets. With a balance sheet prepared by a CPA, business owners have a detailed record of property owned, equipment, and even any liabilities that can affect the value of these assets. With this report, you can provide third parties with the reassurance that your business is stable and financial data is well organized.
Determine Profitability – Which products or services provide the most profit for your business? If you aren’t sure about key drivers for success, an income statement can provide necessary clarity. As profit is affected by the amount of money expended to provide a service or product, this is taken into account on an income statement as well. Use this report to understand daily operational transactions and how money is made at your business.
Understand Spending Habits – How much money are you paying for routine and necessary expenses, such as any vendors providing supplies to your business? Where does your current inventory stand? The money that moves into and out of your company is displayed on a statement of cash flow on a monthly basis. As a business owner, it’s important to know the cash coming into your business is not outweighed by the money leaving. Positive cash flow is important for continued operational success.
Business Analysis with Routine Financial Statements
If your business is experiencing negative cash flow or if you need help optimizing operations to reduce overhead, routine reporting plays a key role in meeting these goals. To make any successful strides in improving internal controls and promoting business growth, you need to know where you stand financially. This information has to be current and relevant, but there’s no such thing as too much data when it comes to analyzing the ways your business can improve current processes. Without these reports generated on a consistent basis, business owners are in the dark about where they stand and what steps can help them meet their goals of increased profits and reduced liability.
Ask Us about Monthly Business Accounting!
While profits and loss statements, cash flow reports, and income reports are certainly important, many business owners don’t have the time or knowledge to create them. If you need help with financial write-ups for your company, contact The Accounting Office for your consultation.
Tax Deductions: Business vs. PersonalPosted on November 27th, 2017
When you’re a small business owner, there are times when your personal life and finances are closely connected, especially if you work out of your home. But for tax filing reasons, it’s important to consider business and personal funds as inherently different.
For help untangling your finances, consider the following tips:
Create Separate Bank Accounts
Bookkeeping processes are complicated enough as-is, but when you do not separate your personal receipts from those associated with the cost of business operations, determining the source of money can become even more difficult. To keep expenditures as clearly delineated as possible, create separate bank accounts for business and personal funds. Do not pay for home supplies with your business card and vice versa. This way, your bookkeeper will be easily able to determine which expenses can be written off to benefit your tax plan.
This will also prevent long phone calls with your accountant at the end of the month, which typically involve pouring over paperwork, in an effort to determine which expense was applicable for the business and which was spent on personal needs. And, as is very common, if you wait until the end of the year, this task is all but impossible.
Closely Evaluate Home Office Space
If you run your business at home, you should be aware that the IRS is precise about deductions in this particular circumstance. Determine the square footage devoted to your business space and ensure that it is used for business operations only. If the space set aside for your company also occasionally serves as a child’s play space or a home gym, for example, it cannot be considered an office. Carefully separating the business and personal in terms of physical space is vital for determining what part of utilities and mortgage are allocated for operating the specific business space.
Evaluate Ordinary and Necessary Expenses
Some purchases are vital to business operations or employment. These include software and even sometimes clothing if you require a uniform. However, be careful to consider how these items are being utilized. If you purchase QuickBooks for routine bookkeeping operations, this could be considered an Ordinary and Necessary Expense which is a tax write-off. However, if you purchase TurboTax to handle personal returns, this is not an expense you can include in a tax document. The same goes for office-appropriate business attire; suits are not the same as a uniform and cannot be written off in the same manner.
Ask our Business Accountants about your Tax Return
Every business owner wants to take advantage of the most tax credits available to them. The best way to do this is to work with a professional accounting firm. At the Accounting Office, Inc. we provide year-long accounting support and business tax filing to ensure you get the most out of your tax return. Ask us what we can do for you!
Why Seek Help from a Tax Professional?Posted on November 14th, 2017
Year-round tax help for your small business is vital to reducing tax liability, filing timely returns, and enjoying a stress-free tax season. While a business owner has plenty of other tasks to occupy their time, an accounting professional keeps themselves up to date with the latest in local, state, and federal tax regulations.
If you’re considering seeking tax help at a professional firm this year, you can take advantage of the following benefits associated with this time-saving financial decision:
Dedicated Planning Well Before April 15th
Saving on taxes is a process that begins well before tax season. Effective tax planning with a big-picture focus can help you determine which business expenditures will affect your long-term tax liability, while identify which expenses can be written off during tax season. A dedicated tax professional helps uncover hidden deductions and tax credits while avoiding potential tax shortfalls and penalties. Our process begins planning for 2018 in December of 2017!
Commitment to Client Success
Experienced tax accountants understand that tax planning goes beyond sitting with clients at the end of the year to submit documents. Your tax filing experience can be significantly improved by a professional who is dedicated to continuing education on tax regulations and strategies, and stays up to date on changes in legislations to maintain the knowledge necessary for ethically reducing liability.
While many tax preparation chains or do-it-yourself tax websites can help you complete a single task, a tax accountant makes sure to keep in touch with you throughout the year, providing valuable and extensive tax knowledge whenever necessary. We create tax plans that best match long-term financial goals, while making the most of professional tax deductions and efficient accounting strategies, all included on your monthly investment.
Comprehensive Services That Go Hand-in-Hand
Tax planning and preparation are often should be supplemented with bookkeeping and accounting support. This allows a tax accountant to provide you with comprehensive services that ensure your business meets realistic financial expectations. When tax planning and preparation is are coupled with bookkeeping, financial data that has been tracked and kept organized throughout the calendar year can be used to reduce your liability beyond the immediate tax season and create predictions of tax responsibility well in advance.
Ask our Firm about Your Unique Tax Plan!
If you are in need of comprehensive tax services paired with professional bookkeeping and business accounting, contact our firm for a consultation. We provide experienced and professional tax services to help businesses succeed!