Thinks You Must Know Before Outsourcing Accounting and Bookkeeping Services

Outsourcing accounting and bookkeeping services from an accounting firm is an advanced step you should take for the success of your business. Accounting firms provide services that are scalable, flexible, affordable and accurate. A strong and reliable accounting function in the business allows business owners to enjoy the peace of mind, and better run the business. However, before you outsource accounting and bookkeeping services, it is important to run a background check of the company to check the compatibility of the business relationship. Here are a few things you must check:

1 – Customer reviews:

The right way to check how the accounting company treats its associates is knowing more about their previous client’s and their experiences. You can anytime go online and check client’s review door their services.

2 – Check on the experience:

You can profiteer the best services only when you hire an accounting and bookkeeping firm that is highly experienced and knowledgeable. The company you are willing to hire must have experience in dealing with businesses like yours. You should also ask about their work style, type of clients they entertain the most and how are they planning to proceed with your business.

3 – IRS Navigation abilities:

Every business wishes to hire a company that helps it in navigating their interactions with the IRS. A company that offers Accounting and Bookkeeping Services along with IRS solutions is the best to hire, you can get all the solutions under one roof.

4 – How accessible they are:

You can need the company at the oddest time and the best one will be right by your side. A company that values its customers and believe in quality services will make it possible for you to access them anytime. This won’t be possible when you hire a company that is way too large and established. But a medium sized firm that is dedicated to make a mark in the industry would go an extra mile to give you the best you deserve.

As a business owner, it is your responsibility to hire the best resource for your business. By outsourcing the best accounting and bookkeeping services, you can enjoy a consistent flow of services, no-frauds in accounting and complete peace of mind. Be attentive, take your time and choose that one company that suffices all the needs of your organization and keep your accounting and bookkeeping department well-recorded and up-to-date.

Simple Accounting For The Small Business – Bookkeeping Using A Simple Spreadsheet Template

Starting a small business out of your home, offering products or services like business consulting, photography, selling on the web or a MLM? You are now faced with tracking all your expenses and revenues for your business and you certainly don’t have the money yet to engage a bookkeeper or accountant. If your business is a sole proprietorship, whether it be a Canadian Proprietorship or a US-based Proprietorship, you do not require an accountant to submit your company financials (books) to the IRS (USA) or Revenue Canada). Your business revenue and losses are reported as part of your annual personal income tax. For this small business start-up, you won’t need to buy fancy accounting software, like Quick Books or AccPac to track your business.

Only as part of incorporating Bizfare Enterprise Inc in 2005 was it a requirement to engage an accountant. My accountant did insist on using Quick Books software for my business accounting. Up until then using a simple spreadsheet template served my business accounting needs for over ten years. This simple spreadsheet accounting stood the test of multiple audits by Revenue Canada (CRA and Revenue Canada Goods and Services Tax. Both the hardcopy columnar pad and an electronic spreadsheet version of my financial books were accepted by Revenue Canada. (BTW the audits disclosed more ways for me to claim back additional taxes for the previous three years! Now that’s my type of audit!)

In your new start-up business venture, you likely will generate somewhere between 10 to 30 accounting transactions per month. These transactions would be items like Expense, Revenue (sales), Liability (Loan) type transactions and Sales Tax (Federal + State/Provincial) Collection/Deductions. These transactions are further broken down into various Business Accounts. All the Accounts you set up for your business is called a Chart of Accounts. Recording your business financial transactions (Journal Entries) can be executed with pen and ink on an accounting columnar pad or electronically with your computer using a spreadsheet program (MS Excel, Open Office, Star Office).

Whether you employ electronic or hardcopy media, you need to develop a simple Journal template to create your Business Synoptic Journal. This Synoptic Journal format has the advantage of allowing you a complete view of all your individual journal entry transactions against all your various Business Accounts. Creating this Synoptic Journal is easier to do than you think and requires no prior accounting or bookkeeping knowledge.

TIP #1: You could further reduce the accounting line items (Journal Entries) by consolidating like items such as ‘all the Sales for the month’ and ‘all parking receipts for the month’ into one totaled line item for the month.

Where do you start to identify the various Business Accounts required for your Synoptic Journal?

If you currently work for a company or government, secure of one of their employee expense forms. Look at each of the areas identified as expenses – meals, mileage, hotel accommodations, taxi, car rental, telephone & cell phone, air fare, office supplies, etc. This is an excellent place to identify the various Business Expense Accounts you need to set up for your business accounting books. To complete your business Chart of Accounts, include a Business Bank Account, Sales, COGS (Cost of Goods Sold), Sales Tax Collection, Marketing Expense and others as required. Each of these Accounts will be a listed as a title across the top of each column of your Synoptic Journal. Each row (line item) will be the individual journal transactions entered by you. The journal transactions are grouped and summarized for each business month; usually, January through December.

So your Synoptic Journal would look something like this Sample Synoptic Journal at http://picasaweb.google.com/carl.chesal/BookkeepingTemplate.

The column headings might be in this order (from left to right):

DATE | DESCRIPTION | BANK DEPOSITS | BANK WITHDRAWALS | SALES REVENUE | COGS | SALES TAX COLLECTED & REMITTED | OFFICE SUPPLIES EXPENSE | EXPENSE #2 | EXPENSE #3 | ETC

TIP #2: Unless your business is Incorporated or an LLC, you don’t need to go through the expense of opening a business account with your bank. Usually Business accounts charge a higher monthly fee, charge for printing checks (cheques) and don’t offer any interest on your monthly account balance. Instead, open a separate personal bank account (maybe savings). This will show the ‘taxman’ that you are keeping the business separate from your personal banking. Remember you are a sole proprietor and all your business income (and losses) are to be applied directly to your personal income tax submission ( a s per IRS and CRA).

To save you time and make is very simple, I have already created a simple spreadsheet Synoptic Journal template that performs all the calculations for each month and rolls up the 12 business months so it can easily be included in your annual personal income tax preparation. This Synoptic Journal template has Debit/Credit checks and balances, tracks sales taxes, mileage and totals each account for your entire fiscal year. If you want this FREE Bookkeeping template, you can get it at Communicate Innovate. With a few key strokes, which will help identify yourself, I will gladly send you this FREE Synoptic Journal Template and also any future Small Business Tips.

TIP #3: One Rule of Accounting is that every time you record a journal entry (line item which applies the transaction against the appropriate business accounts) the Debits and Credits MUST REMAIN EQUAL at ALL Times. This Debit Equals Credit calculator is built into this FREE Bookkeeping Template. When you have completed entering a line item (journal transaction), check to ensure that the amount the Debit cell equals the amount in the Credit cell. If they are not equal, you have not entered the amounts properly in your journal transaction. Correct the problem before entering your next journal entry.

You are now equipped to capture your business financial books with some simple accounting software. Happy bookkeeping! And Happy Selling!

From Bookkeeping to Strategic Advisory: A Growth Switch for Accounting Professionals

Bookkeeping is mostly about data entry, and digitization of processes in every field is replacing the manual work. Now, client requirements have changed to financial advice rather than just compliance reporting. Thus it becomes imperative for accounting professionals to change their approach and increase their value in the upcoming business market. Advanced software integrated with technology provides an easy-to-use platform like QuickBooks cloud hosting that has already altered accounting processes.

The rapidly changing accounting industry will bring about many challenges and opportunities for accountants and their clients as well. Seizing the chance one should prepare themselves to confidently offer their advisory services as per requirements. But the trouble arises when you are not sure of the best way to do it.

The key here is to implement an effective business process that will guide your day-to-day activities to build up profitable advisory services.

1. Do not limit your services and expertise.

Create a standard business process that can be applied to all types of clients, no matter of which industry. Going niche may be the current hype, but that means your specialization should be a narrow category. Going forward with only a niche accounting process can be a success, but its scope has to be managed well. The ideal way is to be flexible with the clientele and not industry specific for standardized services, but gain specialization in your niche.

2. Keep your work scalable and fruitful.

Design your process with the understanding that all cannot be done in a month. Also, the work you do must be scalable and profitable. For that, you must deliver a decent amount of business guidance to your client every month. Not all, but enough. It is wise to create a list or a menu of extra services that can be provided at an extra rate.

3. Selling your services.

Everything boils down to this – sales and client satisfaction. Build a process that includes built-in steps for selling and customer engagement as a task. This involves everyone in your firm to successfully engage with and make sales to clients.

Establishing your financial advisory business model needs a manageable scope for focus. Outline on what you can deliver to your clients each month. Create a clear pricing model corresponding to each task. Lastly, build an infrastructure with the help of tools and software to support your business model.

The Current Scenario

A survey was conducted to quantify their firm’s share of revenue that comes from advisory or consultancy work. The results were surprising.

Almost half of the accountants said that advisory tasks amount to just 10 percent of the total revenue. But the desired rate is to be at least 40 percent. There is a huge gap in the numbers, but to be successful in the future, that gap has to be filled.

Our education system prepares and trains accounting professionals with the sole focus on technical skills. Proficiency in these skills makes you an expert, but not a strategic advisor. When dealing with clients, one can easily start to explain accounting steps and process rather than strategies that the client needs to implement for growth and profit.

Advisory may seem simple, but it is a whole different ballpark of which we do not have a lot of insight. Strategic advising means connecting with clients and gaining enough leverage to influence them to take actions that improve results.

For a successful shift into advisory and building a firm that is ready for future accounting challenges, you need to acquire the set of tools, talented people, and a mindset that is largely dependent on soft skills. Your job will be to advise and not do the work.

As an expert advisor, your role is to ask questions and identify challenges in the business that are causing stress financially, or strategically. Once you know the point of stress, an action plan can be created that will eliminate the problem and prevent it from occurring in the future.