Bookkeeper’s Cost vs. Bookkeeping Quality

It’s kind of preposterous how people get stuck on the factor of price when availing a service. It applies more to the subject of bookkeeping; service buyers ritually overlook the quality of work, which they compromise in return of a lower price. The result is an erroneous bookkeeping service that costs double or triple than the fixed budget.

However, the reverse also holds true; there are a handful, to whom, quality of a service comes first. Many bookkeeping service providers take advantage of this perfectionist’s attitude; while they submit a flawless job, the wallet of the service buyer runs dry. So where to strike a fine balance that shall provide a quality service for a reasonable price, measure for measure?

Factors to judge a bookkeeper

To answer the above question, we need to understand first the definition of the word quality and how it applies to an outsourced bookkeeping assignment. Quality here can be defined as a work that’s done in a concise manner, is complete and delivered on or before the scheduled time. All these factors define a good Bookkeeper.

Now, with all these factors taken together, there must be a minimum definite price for which, it can be bought. Bookkeeping cost thus really depends on a bookkeeper; if it’s an organization, then the management should set the cost. Since bookkeeping is a service-related business; therefore, time equals to money. A quality job thus demands more money since it takes more time to get the records spic-n-span.

But the good news is, bookkeeping cost is negotiable. The rates change according to the market; if the rates fit your budget and the quality your mindset, your service provider may well receive a continuous business from you in the future. This is a strong point you may use while negotiating.

How to choose the right bookkeeper

So analyze the bookkeeper before you choose him. You may have a different need (a different concept as well) for your business; therefore, try at least three to five different bookkeepers. The one, who gives the least rate, has a satisfactory track record and is a patient listener who also asks when in doubt should be the bookkeeper for you!

Payroll Accounting – Hazard of doing it yourself

There are more number of small entrepreneurs than the larger ones who continue staying small because of misconceptions and their inability to understand certain business fundamentals. One such is payroll accounting; while entrepreneurs remain skeptical on the confidentiality of data leaking out, they subject themselves to a gargantuan task – often accompanied by irreversible errors – that eats the better portion of their time, barring a business’ further growth.


• DIY - Payroll accounting hazard

To any person running a business and employing a fairly large number of people, payroll accounting turns out to be true headache. Even if we overlook the intricacies of the rules, rates and regulations, putting everything in the correct format is enough to boggle even the smartest business brains; an inevitable result for such mistakes even in a small business payroll can cost a fortune.

Let’s take a look at the common errors you may confront while doing the payroll accounting yourself.

Payroll tax deposits: This relates to withholding taxes from an employees' gross pay. An employer matches some of these while paying some, which an employee doesn't. These taxes require to be paid at very specific intervals and within strict deadlines to either or both federal and state agencies. A wrong calculation or missing the deadlines may invite some real stiff measures.

Payroll tax returns: Every quarter, certain reports conciliate the earning of employees with the payroll tax deposits. It’s also important filing annual reports that reflect the authenticity of the quarterly reports. The role of the W-2 form cannot be overlooked as well for the employees to file personal individual tax returns. All these require a sharp eye and mechanical accuracy to keep fines at bay.

• Why outsource payroll accounting

Firstly, because outsourcing payroll accounting is a smart option that can save a lot of hard work in exchange of a negligible amount. To compare, tally an outsourcing firm’s charges against the amounts that may show up as fines. Besides, the time you shall be spending to keep those records shall bear more fruits if invested on the business development strategies. And it’s easier to call in the hours and checking the bank account for an amount that shall cover the payroll.

Now, all these points hold true for both the starter and the established; while the starters may avoid unexpected expenditures (fines or the salary of a full time accountant) and make that money flow to support some profit-yielding strategy, the established ones may save more money and concentrate on newer measures to take their business to newer horizons. But mostly, it’s an age of specialists and payroll accounting requires specialized services.

• Benefits of outsourcing for small business

So outsource payroll management to benefit in multiple ways. Firstly, you save a lot of time; small business payroll handling, though embraces lesser number (10-30) of employees, is still a tough task when the details stay associated. Instead, you may outsource payroll accounting and focus on stuff that can make your company grow. Marketing and business development are colossal tasks as well; there is no need to shoulder more burden than is necessary. Besides, outsource payroll to save a great deal of money. If you do not want to handle the accounts yourself, the second best option is to employ a group of accounting professionals full time. It means you have to pay them a fixed amount every month along with insurances, benefits, sick leaves, vacations and other related expenses. Usually, this is much higher than outsourcing the job to independent professionals. The price shall include everything from calculating taxes and deductions, filling out forms, printing them out and delivering the cheques. But most of all, the payroll experts are specially trained and offer you a specialized service free from errors. And when thinking of the bigger picture, you cannot possibly do without specialization!

Struggling US economy causes stocks to nosedive

The fall experienced by the stock market on Tuesday has put the proposed $700 billion plan at stake; internal disputes of the congress may delay further the efforts to rescue the financial sector, thus pushing the U.S. economy into a greater darkness. However, it’s also true that index futures went up following an extended trading of $5 billion that went as an investment. It was Warren Buffett's Berkshire Hathaway keeping Goldman Sachs Group in its good books.

Following the investment was a straight 8.4% rise in the stock prices for Goldman Sachs; the side effects were futures that opened sharply higher on Wednesday, which also dragged the shares of other banks up. The highest was Morgan Stanley, with a 9.5 percent increase in electronic trading.

Probable factors for the disaster

Among many others, the statements from Richard Sichel (Chief Investment Officer, Philadelphia Trust Co.) reinforced some faith back into the financial sector. "It's clearly a positive when Warren Buffett sees value in a company. Buffett is so highly regarded as an intelligent value investor, if he's putting a lot of money into a company that's been beaten down, it sends a message to the market that maybe not every financial company should be ignored at this point." Considering the downgrades, the statement was enough to revive hope among many a hurt ones, including the shares of Bank of America (2.5%) as well as energy sectors that weakened with a rising oil price. As of now, to quote Edward Craig (Head, Cash Equities Trading, Jeffery’s Group, New York) - “everybody's waiting for this plan to be detailed, and the longer it's delayed, the more people speculate that maybe it won't happen. The one thing the market hates is uncertainty.” But while colossal organizations like General Electric (down by 4.6%), Apple Inc. (down by 3.2%) and Microsoft (down by 0.2%), there are more numbers of declining stocks that can outnumber the forward-moving shares by 2.6 on the NYSE.

Potential corporate fraud – FBI investigates

• FBI probes Fannie, Lehman & AIG Case studies

Guess who’re the current names in the FBI list? Fannie Mae is one; the rest are Freddie Mac, the Lehman Brothers Holdings Inc. and AIG Insurance. However, it’s the senior executives for AIG that are the prime targets of FBI. The reason? A potential fraudulence suspected on mortgage deals. Despite the lack of specifics by FBI, it is now an open secret that their inquiries are just a part of a broader investigation.

• What’s being investigated?

FBI suspects these financial institutions – to be precise, their senior executives - are responsible for misinforming the public that has contributed to the U.S. mortgage industry collapse. As reported by one of the federal law enforcement official, it is one of the 26 potential corporate fraud cases that are currently being investigated by FBI.

• From the horse’s mouth

The U.S. Congress has been reported of 24 such cases of potential corporate fraud. Robert Mueller (Director, FBI) disclosed the details of the same and also the fact of the count, which were 21 during July. As a testimony, the FBI chief also confirmed the House of Representatives Judiciary Committee regarding pursuing the corporate executives of the mortgage industry if the situation demands, from every level to frame the federal charges on the ground of misstatements of assets.

International Accounting Standards

A positive approach by the securities and Exchange board

• US move towards International Accounting Rules

There are a lot of people who has come across the name Securities and Exchange Commission; what a large chunk is still clueless about is their decision regarding allowing certain big-scale American companies to use international accounting standards from 2009. The figure is expected to reach 100% by the end of 2016 and if everything goes right, the world shall move towards using one fixed set of standards to facilitate the comparison of different companies by investors. Differing regions are not going to be an issue in this endeavor; moreover, raising capitals for an attractive market shall become easier for firms interested in that particular sector.

To fit the criteria as presented by the proposal, a company needs to be one among the 20 largest companies in that industry sector worldwide. The commission shall also require the large American companies to comply to the new set of international standards to prepare their financial statements for the year 2014, with the smaller ones following the path in 2015. The smallest companies; however, may delay adopting to the new standards until 2016, since the final decisions on these shall be pending till 2011 and shall be in the hands of S.E.C.

The only problem that experts are speculating is regarding learning new accounting rules by the auditors and other accounting professionals, but considering the advantages, it shall be a small burden to bear. And facilitated by a new monitoring body comprising regulators from many countries and soon to be established by international authorities, the chances of political influences can simply be overruled. That leaves us only with the question of uniform application of the rules, which, though being tried to be converged by the international and the American board, are still showing signs of differences with the international rules.

• Advantages & Disadvantages of a common accounting system

In a common accounting system, accountants stay responsible for recording the revenues and every form of expenditure along with acquisition of assets and disposal according to an actual amount of money (or money equivalent) that is received/paid to complete a transaction. However, the common accounting methods only consider an acquisition cost of assets without recognizing their values in a current market. That’s cost allocation and not determining an asset’s value; despite the methods being informative regarding acquisition costs of assets as well as their deprecations, they ignore every possibility of determining the current market value of the same asset, which may be either higher or lower than is suggested.

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US Federal Reserve loan resuscitates Insurance giant AIG…crisis looms large on Morgan and Goldman.

The chaos spread after the Lehman Brothers filing for bankruptcy protection has caused enough ripples and with the breakdown of AIG it could have spelt doom for the US financial market and its ripples could have affected the World Economy.
With fears unabated on the ability of Investment banks access to liquidity, the Goldman Sachs and Morgan Stanley shares dropped by 10 and 18 percent and were giant losers.
The other financial Institutions hit by this fallout are Wachovia, Citigroup one of the biggest US bank. Also the stock of Washington Mutual fell sharply. These falls comes after AIG was taken over US Federal.
The Federal Authorities pumped in $85 billion in the AIG lifeline for the period of two years with a committed stake of 79.9 percent equity.
The decision came two days after the US authorities let Investment bankers Lehman Brothers into bankruptcy court. Unlike Lehman brothers AIG was considered to be more important as its collapse can trigger a fall in the global economy.
In the course AIG would have to pay a steep rate of Interest that is 8.5 percent and above, equaling the current rate of 11.4 percent.
The AIG being the premier sponsor of Manchester United, it means the US taxpayers money going to the English premier league.

US recession looms large

• Just a song before we start…

What goes up must come down; the only two things that don’t follow this set rule are age and experience. US have followed the same path till now; the post-WWII America has gifted its people an enjoyable life, have given them the freehand of wasting for pleasure (so cheap were food, gas and similar other things), but of recent, Asia and the neighboring developing countries have been noticed climbing up the success ladder. The world doesn’t catch a cold now when America sneezes like the previous years and The American Dream is now turning to a nightmare. And joining the league of American Presidents is currently being considered as the stickiest job of all.

• What is recession?

The world seems to have gone paranoid talking about a recession, chances of which are now looming over the United States and being reflected to the max in the form of a worldwide economic slowdown. So how come the weakening of the American economy is affecting the rest of the world? To know that, we must have a clear concept of what a recession is.

Recession is defined as a decline in a country's GDP (gross domestic product) growth over consecutive quarters of a fiscal year. If these quarters are noticed to be slowing down, a recession might be imminent.

There can be several factors triggering a recession; it could be due to an economy slowing down after a period of steady growth. This could occur following the trend a normal economic cycle follows, which is a six month to twenty-four months recession occurring after a 6 to 10 years of steady growth. It may also happen if the consumer sections start losing confidence in the way the economy is growing and become tight fist, thereby hampering the demand for goods and services. This eventually leads to a decreased production rate, loss of job and an increased unemployment rate. As a result, investment sectors also head for a toss since people fear to put their money in fear of reduced stock values and the stock markets also start gathering negative sentiments.



• Current crisis in US

Despite the Bureau of Economic Analysis’ denial from declaring a recession, the world fears an overall slowdown of the global economy. Is Asia one of the continents to suffer the same way? To know the results of how the US slowdown shall impact the Asian market, it’s paramount that we get an idea of the crisis US is facing currently. That is to say, the prime causes and the effect they are bringing in.

The sub-prime mortgage market in the US exhibits more number of defaulters now than before. The home-loan defaults are now a major crisis; this also proves that there re more number of people with poor credit-worthiness/unstable incomes than the well to do. The nose-diving sub-prime market has thus led major banks into trouble; what was thought before would take the housing market to new heights, backfired the schemes of making home-loans easily available. The boom was a flash-in-the-pan; it failed to sustain the momentum. Inevitably, the colossal loan defaults made the sector collapse. Foreclosures became the most common thing that joined forces with the rising oil prices ($100/barrel).

• How will US slowdown hit the Asian market?

The stock markets follow the economy that is currently traveling downhill. That’s affecting the economic buoyancy and In India, the stock markets crashed due to this slowdown. The Sensex went down almost 13% in January but a bounce-back occurred as soon as the US Fed reduced the interest rates. That’s better than before but Indian investors don’t seem too happy with the current stock prices waning.

Fears are also looming over the outsourcing sectors, of which, Asia holds the lion’s share. If US has less money to spend, the outsourcing industry that has grown substantially all these years is going to decline; the Indian economy alone is likely to go down as much as by 2% in the 2009-2010 fiscal year. Profit margins shall shrink drastically.

• Impact of recession

As for the other exporters, the strengthening of the rupee against the dollar is heralding long-term, stable prospects; it shall make foreign money enter more to Indian markets and reduce the oil prices. That’s definitely bringing down inflation. Overall, either entire Asia would be falling victim to a recession triggered by the US economy, unless it becomes totally independent from the rest of the world.

• How to fight recession

Proposals are on for a lowered tax structure as the first step; it amounts to a $150-billion bailout package. Moreover, the US government has taken initiatives for creating more vacancies in the job sectors (new jobs as well) to boost both manufacturing and services sectors with special attention been given to the private sectors to avoid the ill-effects of the current crisis.

Public accounting firms – need for accountants

Overview

Preparation, maintenance and review of the financial statements and records belonging to other businesses - these are all that define what a public accounting firm is all about. Additionally, it’s also tax calculation and submission of returns that form a crucial part of the functions of any public accounting firm. A CPA license I therefore, a must for the employees of reliable public accounting firms; however, degrees in corporate law are also preferred if anyone wishes to get into the public accounting firms.

Pros and cons of hiring accountants

Those fresh out of colleges and not too sure of where they should head for a prospective career, often choose the public accounting firms as a place for seasoning. An internship at any of the top-of-the-line public accounting firms imparts the required knowledge as well as provides a hands-on experience on the operations of a number of companies from different industries; as a result, the resume of a person working for sometime in the public accounting sector receives major face lifts. It counts with a wide range of potential employers including the client companies. The financial reward comes complimentary. The companies hiring certified public accountants or accountants who are similarly qualified thus get a dedicated service regarding taxpaying procedures. Moreover, a company need not run around to know the benefits or relief it is eligible for and neither does it require to spend extra hours or dollars if something crucial needs to be taken care of immediately. But then again, while outsourcing to accounting firms is a pay-per-assignment phenomenon, hiring certified public accountants for dedicated services is a recurring expenditure and for running the audits, you need to hire certified public accountants from outside. This increases the costs as well.

Types of Public Accounting

i. Audit: For small businesses, outsourcing stands as the best choice to keep their financial records spic-n-span. For larger businesses, the internal accounting and finance personnel get it done. But when it comes to conducting the audits, they hire the public accounting firms. The audits are inspections of the accounting procedures and records and require trained accountants or even better, the CPAs. With publicly traded securities, any company requires its financial reports to be public (as per the law) and for that, they need someone impartial. Independent and certified public accountants (or public accounting firms) are thus the best choices; more so, because there also stays associated the analytical skills for running the securities research.

ii. Tax preparation: Small businesses or individuals alike can benefit largely from independent and certified public accountants or the public accounting firms, in terms of preparing the tax returns. For larger businesses, it is generally taken care of by in-house staff despite their preferences of getting the results checked by an auditor later. The tax function requires staff with CPA licenses and/or law degrees. The tax professionals within a public accounting firm also advise clients on strategies to reduce their taxes in the future.

iii. Systems Consulting: Designing and implementation of a data processing system for a large-sized public accounting firm is also a task that can be accomplished by public accounting firm. To simplify it more, it’s a specialized service in the realms of accounting and financial reporting, where an automated system takes care of everything. A technical expertise is definitely an added advantage for the firm undertaking such tasks and the job embraces understanding a client’s needs and developing accordingly a solution that’s user-friendly.

iv. Management Consulting: General management consulting forms an intricate part for some of the largest public accounting firms. Management consulting is about providing advises on businesses; it ranges from setting an overall business strategy to finding solutions to highly specific problems regarding logistics, workflows or organizing staffs.


Specialization

Specialization and consultations are the two sides of the same coin where one cannot happen without another. A public accounting firm’s tasks of selling engagements become easier if there remains present industry- and functional specialists, who can solve problems for their clients with relevant experiences and knowledge. However, specialization also restricts a person from delivering solutions from different perspectives and doesn’t provide room to his creativity; instead, he needs to follow set guidelines to appear to a solution. That’s an enhance productivity at the cost of job satisfaction for those who seek variety.

Conclusion

From one-man shows to an entire platoon, public accounting firms can vary dramatically in their respective strength of the workforce and are generally partnership ventures than corporations. This alone shows the importance of the people being trained and certified in their respective job sectors (unless a partner is good, none would like to stick with him); more so, for unless there remains an assurance regarding expertise in a vast number of related fields, big, corporate clients are not going to entertain.

Health Insurance – finding the best deal.

Health Insurance – finding the best deal.

Fear of the unknown is perhaps the strongest emotion that compels humans to initiate an action; evident from their interests ranging from education to astrology and from their bonding they share with others, it is the same factor that makes them take up health insurance. Surveys have proved that people usually take the step in order to make their near and dear ones feel secure instead of them, but more often than not, end up choosing the wrong policies. It’s mostly the health insurance agents who are to be blamed; however, staying well informed on certain aspects regarding the policies and the advantages of health insurance schemes can help you find the best deals and save a lot of hassles later on.

Finding the best health insurance coverage depends on a few factors; these are the criteria, which must be fulfilled before an application is made. Instances have been found where the insurance agents had misguided applicants just because a certain policy would return higher commissions upon sale. But if the buyers stay well equipped with sufficient information on the insurance coverage, the same benefits can be availed with lower premium rates.

 Buying Health Insurance

Prior to buying, you must understand the categorizations of health insurance plans. If it’s a managed care health plan, then know that it is a scheme that’s more popular and brought over by Health Maintenance Organization (HMO), the Preferred Provider Organization (PPO) and the Point-of-Service Plan (POS). For fee-for-service or indemnity plans, there remains an opportunity to choose a primary health care provider; it also eliminates the needs for referrals if there comes up a need for specialized treatment. This is why an indemnity plan receives much more acceptance despite a higher price tag that remains attached.

But we also need to focus on the state policies to find an affordable health insurance. For residents of Kentucky, Maine and Washington State, choices are limited; for rural areas, a HMO plan is not always the best choice. Most of the states lack Association plans, despite the good deals they offer. Add to this the options that raise deductibles on coverage; however, one good thing about them is they lower the prices significantly.

Thus, to make the most of any given situation, follow the steps discussed below.

 Health Insurance in 6 steps

i. Awareness: Be clear about your preferences. There are different insurance policies for people with different needs upon which minor improvements are possible.

ii. Compare: Quotes must be obtained from different insurance companies to find out who’s offering the maximum level of coverage that you want. Then choose the most affordable one.

iii. Negotiate: Ask for a reduction in the premium amount after choosing an insurer. This shall gain you the best prices for your preferred insurance coverage.

iv. Group Policies: Group plans open the doors to maximum afford ability since they allow negotiations more than any single health insurance policy.

v. Deductibles: The deductibles are usually payable on an annual basis and vary accordingly with specific policies. Increase the deductible amount to lessen the premiums but it may also turn you down in case you need to rely entirely on a health insurance policy.

vi. Flexibility: PPO and HMO plans may provide lower rates if you stick to the list of preferred providers.

DIY Bookkeeping – 10 common mistakes

Numbers are boring and so are mechanical tasks; put them together and that perhaps explains why small business owners ignore bookkeeping till it’s the eleventh hour. So, that’s hurrying; and hurrying makes you pay the prices dearly at times. So dollars just migrate from your ledger’s bottom lines to the Tax Office. And it’s a process called audit that stays responsible.

Auditing examines carefully for accuracy of accounting procedures and records maintained by a business. In case mistakes are noted, the only way to rectify them is by paying fines. Thus, to maintain the fine balance between do-it-yourself bookkeeping and avoiding mistakes, you should pay close attention and avoid a few things from occurring.




First of all, it’s the accounting software packages. No two packages are made the same and however simple they might seem; they end up complicating the processes all the more if the user (in this case, the business owners) is not savvy about them. The end result is double (or even triple) the amount of work and desired reports is well replaced by inaccurate bookkeeping records. Before you start using such software, it’s paramount that you have a formal training on the same. Nothing that’s too complicated for a certain level of accounting expertise can make things go better.

Perhaps you have heard about short-changing; those who have not, it is cheating someone by not returning the person enough money. And that person could well be you! Many of the business owners do this when it comes to tax deductions; what can be claimed rightfully is often neglected because accurate cash expenditure records are never maintained.

Now, about the Goods and Services Tax and do it yourself bookkeeping mostly gives rise to three simple mistakes regarding:

• Claim of GST credits against invalid/no tax invoices.
• Claim of GST credits for an entire purchase amount while the goods are used for private purposes and not up to the fullest extent.
• Claim of GST credits when the supplier(s) is/are not registered for GST.

Staying careful on these three aspects can alleviate complications at the time you file your taxes.

Another part often overlooked by self-taught bookkeepers and during a do it yourself bookkeeping session is sending invoices too late. This lets overdue debtors escape despite blocking your money. Therefore, keep track through an appropriate system that shall maintain a list of debtors and the payments due.

The policy of super-annuation i.e. an employer paying 9% of an employee’s earnings (not overtimes) is another source of confusion for the self-taught bookkeepers. The Superannuation Guarantee Legislation still stands as an unclear theory to many of us resulting in over payments. It’s important that the policy is clearly understood.

Missing deadlines often turn out to be fatal for a business; more so when it involves PAYG or BAS besides checking records with the bank. The problem triples since no back-ups are maintained most of the times; this proves even more devastating in case there is a technical breakdown. So how to make all the ends meet?

It’s easier than it seems; bookkeeping mistakes can easily be avoided with the help of a trained professional. Even if you are reluctant to hire a bookkeeper working full time for you, there are many who undertake outsourced accounting jobs; with the
right person to polish your account details resulting from your do it yourself bookkeeping skills, there’s absolutely no reason why we can’t see you as the next millionaire.

3 basic steps to bookkeeping success

Introduction

Big business owners are because of foolproof bookkeeping policies; for owners of small businesses, proper bookkeeping and accounting are the keywords to a brighter future. Indeed, bookkeeping brings in together the intricacies related to government regulations, marketing rules and their applications, various aspects of business operation and many of an assistance programs; all these form the very base of business record management and without proper bookkeeping or accounting measures, business success may just stay a dream.

Steps for success in bookkeeping

Things start from the point where a business starts. That is to say, the licenses, registrations, GST (Goods and Service Tax), RST (Retail Sales Tax), excise taxes and setting up the payroll accounts besides opening a business account for carrying out all the monetary transactions associated with the business. As the first step for a successful bookkeeping, keeping track of all of these is paramount. This is because financial records keep account of all income and expenses and this information is necessary for filing tax returns. Therefore, to get started, you need to keep intact your:

• Bills, receipts and payment vouchers: These are the small records that keep information regarding every transaction in a rudimentary form. That said, they are the biggest proofs for the business transactions your company was (and is) involved in. You won’t require to rack your brains for the transaction amounts, dates and other related details on specific sales/purchases id these are kept in a proper order.

• Income and expenditure summaries: Summarizing revenue generations and expenditures according to the category and date in a ledger (preferably, in digital format with a good accounting software) on a weekly or monthly basis shall keep your bookkeeping enthusiasm regular and complete.

• Financial Reports - Financial reports are themselves a summary of all the financial information of your business. The reports make for a regular cash flow analysis and forecasts regarding profits and losses forecast; therefore, maintaining a balance sheet is also paramount for an efficient bookkeeping.

Following the above steps shall make sure one thing; you won’t require to hunt the wilderness at the end of every financial year. Besides, it shall also save you from the labors of convincing the banking sector regarding your credibility in case you opt for a business loan. And above all, any document proving adequate cash flow is what the banks always target; with a planned budget, you can make a lot of your dreams come true without having to go through the unnecessary hassles.

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Bookkeeping – How to manage your books

If entering the debits and credits to proper columns can cheat someone out of several nights’ sleep, imagine what bookkeeping can do as a whole. The thought seriously can numb if your bookkeeping needs appoint in-house staff not trained enough for the job; the only way to get this very crucial job done for running your venture successfully is to teach them the basics and to send the financial records to a qualified bookkeeping professional for the final evaluation. And if they still prove incompetent, then the only option that stays on how to manage your books is outsourcing. Let’s see how.

How to manage your books

There are a plethora of accounting firms who outsource regularly their bookkeepers for getting done the accounts of their clients. The financial records being a pile of complex calculations need regular updates in the accounts books and the one doing it needs to be thoroughly accurate while dealing with the numbers. That makes outsourcing the easiest way to manage your books efficiently; if you are skeptical about the costs, there are ample numbers of good accounting service providers who provide the best services in return for a nominal fee. And even if their fees exceed your one-time budget, they are way down than what you have paid otherwise to a full-time accountant working as one of your employees.

When to seek help from expert bookkeepers

Investing in an expert bookkeeping service ensures the returns in the form of highly accurate data that help you to save the extra dollars. This further ensures the right way for a business being conducted and helps a business head to take significantly important decisions for business growth. Therefore, if you find your business is stagnant or falling due to:

• Wastage of time and efforts.

• Business related expenditures eating into your profits.

• The salary (and bonuses) of an accountant appointed in your firm is attracting a large chunk from your revenues.

• The large business growths are not reflecting in the balance sheets.

…It’s high time that you seek professional services from the expert bookkeepers. Seeking the advices and services shall make you capable of an optimum use of your available resources and make you realize how to change aspirations from just theories to practicality.

Impact of ROA on company’s efficiency

A little extra doesn’t hurt. Definitely, but what if it’s much greater than a little? In that case, a company’s ROA (Return On Assets) can face an adverse impact. Let’s see how.

• Return on Assets

The financial measure accepted widely by the entire business community as a firm’s capability to manage its assets and thereby, a measure of the company’s efficiency, return on assets is also a measure of a company’s economic profitability. The calculations by which ROA is determined is:

ROA= Net Income/Assets.

This signifies ROA or returns on assets to be inversely proportional to the amount of assets, making most companies target maximum net income by minimizing the assets level. Asset management, in other words - return on assets is an answer to the question of generation of profit by a firm by using its assets.

ROA also helps evaluating managerial skills and therefore, determines a large part of the compensation paid to them by the employer. For companies trading publicly, return on assets is one of the factors that investors monitor closely. That makes return on assets a vital part of stock management and it has a direct impact on a company’s stock price.

Now, ROA has a few points attached to it, which one must know before carrying out the discussion any further.

 Return on assets is independent from the measures a firm undertakes for financing its assets.

 ROA is usually defined on a pre-tax basis. It is done for making international comparisons possible.

 ROA compares profitability among several firms practicing financing strategies that are different from each other.

• Improving Efficiency

Assets of a company comprise both equity and debt, which fund the company’s operations. The figure exhibited by return on assets provides investors an estimate on a company regarding how efficiently can it convert the investment to a net income. A higher ROA number depicts a company to be earning more by investing less. Therefore, company A with a net income of $1 and total assets of $5 (ROA = 20%) is converting its investments more than company B earning $1 with $10 of assets. All in all, it’s about making a large profit with a minimum of investments. For credit unions as well, ROA is an important phenomenon in particular. It is because the retained earnings of a credit union make source for additional capitals that are needed by the regulators for making a credit union grow and benefit from the economic scale. ROA, therefore, to regulators are also a tool for stock management that helps in issuing the stocks and bonds to investors outside the company.

Factoring of Receivables

If you are a seller of products or services or both, then you are no stranger to delayed payments. The business world allows pretty often a month or two to the clients for paying the invoices, which often turn out to be a challenging task for businesses looking forward to cover all business-related expenses within this period. The practice is infamous for bringing down the cash reserves, but the paradoxical truth is – There’s hope in despair.

What is factoring?

Welcome to Factoring - the selling of accounts receivable. It generates the cash, thus relieving a business from the pain of waiting for a long period for getting paid by the customers. But factoring is not a business loan; it is an advance payment on an outstanding invoice.

There are factoring companies who set the credit-worthiness of the customers of a business. Contrary to banking policies taking credit decisions based on a company's collateral(s), cash flow and an overall financial history, factoring not being a loan, relieves the company from taking the liabilities to their balance sheets. But above all, factoring is a fast process that bears fruits within a few days or hours as opposed to the length of time required by the banks.

How factoring of receivables benefits a business

Factoring of receivables or accounts receivable factoring has a number of benefits. Firstly, it speeds up the transactions (24 hours max); next, it involves fewer intricacies; provides the required capital so that a business can survive and mostly, it establishes the fact that a business has reliable customers.

In fiscal terms, factoring of receivables pay up to 85% of an invoice in the first installment and then the remaining 15% after the factoring company receives the pending payments from your customers. And all that comes for a small service fee – typically 1.5% to 6% of the total amount pending. Newer businesses benefit the most out of factoring of receivables; however, since it remains depended on a company’s sales performances, it bars a fixed line of credit.

Advantages of factoring

• Immediate receipt of cash.

• No need for showing the balance sheet; its customers' credit-worthiness that matters.

• Doesn’t bar delivering the goods and/or services that are promised.

• A company's financial history doesn’t come into the picture.

• The rates are variable and depend on specific circumstances.

• Factoring cost/fees are tax-deductible. This is because factoring stands as a business expense.

Relation between asset-based lending and accounts receivables

One cannot possibly deny the vital part asset-based lending plays in the country’s economy. But there’s where the matter ends for most of us; at the most, we nod in acceptance of the fact that asset-based lending is a dedicated act that makes the clients flourish. Those who are a little more knowledgeable on the fact shall clarify things a little further; it’s all about lending money on fixed assets. However, the fact that remains in the shadows is the phenomenon also embraces accounts receivable as well as the inventories. Those who are into it shall go several steps higher to speak about collateralized lending; their know-how-s on structuring a proper financing program for businesses are shaping today almost all types of products and services on both domestic and international grounds. However, anything more spoken on the subject right now is like asking someone with a prior experience on throwing stones to fire a .50 ACP bore handgun; let us clear our confusions first on what’s exactly meant by asset based lending.

What is asset based lending?

ABL – that’s how the business world recognizes an asset based lending. No doubt it’s another loan product, but it provides credit facilities that are fully collateralized. The borrowers, thus, are benefited by the high financial leverages while cash flows are kept at the marginal level, resulting from:

• Acquisition
• Re-capitalization
• Turnaround
• Growth Financing
• Management Buyout

The collateral (liquidation value of accounts receivable, inventory and fixed assets) limits asset-based lending, the typical scene being a three-year long revolving credit supporting the required working capital. The process may also be inclusive of a term loan that doesn’t exceed 40% of the credit facility (combined and in total) and liquidating gradually between 5 and 15 years. This, however, depends on the underlying asset’s useful life.

The point on which an asset based lending program differs from a traditional, commercial financing is its primary focus on the collateral’s liquidity; the leverage and cash flow factors are considered secondary. More liquidity and less financial paperwork being its prime forte, asset-based borrowers happily agree to go for the higher financial leverages and fringy cash flows.

Relation between assets based lending and accounts receivables.

Accounts receivables are all about the amounts customers owe in return for goods and/or services provided. This can definitely be termed as a loan given to the customer by a company and hence the company is supposed to receive it back after a certain period to merge it with the working capital. That makes accounts receivables an asset and hence, considered a vital factor to be considered for asset based lending.

This makes asset-based lending allow higher amounts to be borrowed. As a result, the accounts receivable make the lenders less concerned on leverages (debt: equity) and focus more on operating cash flows. All over, the practice represents a business with an ability to meet obligations on the interests. However, it must also be considered that accounts receivables, though backed by calculations, is an assumption the company makes on its expectations. It’s not that all accounts receivables meet fruition.

Insurance companies versus Doctors

The cold war between doctors and health Insurance companies are everlasting, when the doctor asserts the health

Insurance companies resents.
It is a known fact that the health insurance claims needs to be regulated and genuine claims should be made so as to

avoid fraudulent claims. Here again the question is raised by us, do we accept the Insurance company's diagnosis

instead of our Doctor's?

The Insurance companies are always bent upon proving the doctors wrong as it is evident from Anthem Blue cross that

they follow strict protocols in determining the appropriate care and heavily relies on medical evidence and sometime

denying medical care, this had been recently quoted by the Kaiser Health policy report. The Health advisor Jerry

Flanagan also included that the Insurers are going back to the old strategies of the 90's, which resulted in

interrupted care or denying of treatmentoffered by a doctor.

with the recession on the loom and market on rough waters the Insurers are watching their tactics same as we are. So

if you want claims to be made in your way be cautious and keep your medical log up to date.

The stake is always higher for bigger firms who have to maintain many logs for employee compensation and medical

expenses, hence it is always advisable for them to hire good accountants for their accounting services.
The best way to manage your expenses, funds and investments is by keeping a tab on it.

Accounting Services – A hot career

“The old thought of what accounting used to be has changed; it’s not just pouring over numbers alone in a room.” - Mark Brostoff (Associate Director, Kelley School of Business, Indiana University)

The above statement gives us some lowdown regarding what modern accounting services mean; what went unmentioned is the fine blend of good interpersonal skills, communication abilities and attainments regarding being a part of the team and leadership qualities that give accounting its present form. However, that’s implied.

Why choose accounting as career?

Let’s put accounting as the seed from which other career paths sprout. To the uninitiated, this might sound a jargon – after all, how can accounting relate to something like technology or enforcement? So let’s clear your confusion first.

Accounting services stem from certain skills that are paramount for any career that you might want to shift into later. Accounting services, with all its advanced topics, goes beyond that of bookkeeping nitty-gritty and eight-hours-on-the-desk. It provides the opportunity for the exposure that one might require later as a consultant, a manager or an officer or even if the person wants to run his/her own business. Even if it concerns technology, accounting receives the central position regarding the financial planning and the like matters.

Advantages

• Accounting provides a good platform for every other business types.

• Accounting provides an understanding of businesses mechanisms and operations, facilitating a smooth workflow and fame.

• Accounting services, being a dynamic field, provides a vast opportunity to move around within the profession. That ranges from public accounting to consulting and project planning and sometimes, even with the FBI and the Defense.

• Accounting services is a field perfect for those who love challenges and meeting goals by not following the standard norms.

• Accounting triggers the dedication to hard work, excellence and perfection.

• Accounting brushes the interpersonal skills in a person.

Payroll processing services

Payroll processing is a term that encapsulates every procedure that remains directly/remotely connected to paying the employees in an organization -from tracking the working hours of the employees (individually and collectively) to proper calculation and payroll tax filing, incentives, commissions and bonuses to everything mentioned in the labor law rulebooks.

That sure sound a tough job to the uninitiated even if a handful of employees are concerned; but with proper and proven HR software systems, processing the data for a large number of workers also become a cakewalk. Payroll administration requires keeping track of every employee and a well planned and an efficient payroll administration system is thus of paramount importance.

• Choosing a Payroll service

Catchy names being galore, there also stays associated several key factors when it comes to considering a payroll processing company. These are:

- Turnaround time: A fast one is always desirable but without any mistakes; even if there are minor ones, the company should be able to correct them within a 24-hrs time.

- Accuracy: Outsourcing doesn’t take the burden off the employer’s shoulders; in fact, he remains all the more liable for paying employees correctly. Accuracy of information in payroll processing is thus one of the vital criteria.

- Maximum efficiency: This is regarding keeping track/ updating employee information; the process should take minimum time and should offer less complications.

- Customer service: If communications are faulty, the whole payroll administration process suffers and so does the service buyer. A payroll company, thus, must make qualified PR personnel available to provide the help to avoid any potential financial mishandling as well.

• Relaying Employee Information

Employee payroll data is now transferred electronically (courtesy: Internet) to speed up the relaying process. A software stays responsible; the data that are relayed includes the pay rate, the deductions, vacation time etc. for every employee.

A dedicated, standalone computer takes care of the job if there’s no web-based employee payroll system is present; these also take care of payroll tax filing through EFTPS or the Electronic Federal Tax Payment System. This facilitates electronic fund transfers and paying of taxes instead of writing checks. All these culminate into one thing – recognition for your company among prospective applicants.

• F.A.Q.

Therefore, with all being said and heard, double check your short-listed service providers with the following questions:


- How to get started?

An employer needs to submit his business' federal and state tax IDs, the W-4 information and year-to-date balances. Anything else asked for is irrelevant.

- Are direct deposits supported?

This is one of the main advantages of using modem-based services. The employees’ pays are distributed into multiple accounts by electronic transfers.

- Reports provided

A payroll processing company with a good reputation shall offer 100 standard reports (approximately) including Check Register, General Ledger and unused deductions reports from which an employer can choose employee/department/region specific amounts on a month-to-date, quarter-to-date and year-to-date basis.

- User access availability

That simplified, is a full or restricted access for all employees, including HR director and department supervisors at the discretion of the employer. A payroll administration report with an access speeds up getting the employee details.

System security

A SAS 70, Type II audit of internal control and 128-bit encryption technology with multiple, offsite backup locations is vital for preserving the confidentiality of the payroll processing reports; with a 24/7 system monitoring facility, it’s increased tenfold.

Any company practicing the above is a sure shot for any employer, who is currently in the doldrums with payroll administration and related corporate affairs. Find a number of them listed at Respond; what satisfied three million others is bound to take you to the 9th cloud for looking at things from a higher level.

When to outsource payroll service?

Uh, isn’t that asking like when to drink water? Well, jokes apart; let’s have a look at a few questions first:

- Is your business a big one?

- Do you spend considerable time every month figuring out how to treat your employees fairly on the financial front?

- Are you comfortable with calculating properly all the payable taxes and social security (including your own) along with the incentives, commissions, bonuses, overtimes and anything else stated by the employment or the labor laws?

- Do you enjoy extensive calculations regarding tax filing?

- Do you have enough budgets to set up a dedicated team of people handling the payroll accounts?


While a Yes to the first question is enough to inflate your ego, the rest is no better than a pinprick that deflates. You got your answer.

• Time to turn to payroll service

Do the above sound a piece of cake? Certainly not, especially when it is about a large number of employees. This is because processing a large amount of employee data and payroll administration, if not performed in a well planned and efficient way might just bring a windfall to an otherwise smooth system. So give it to people who knows their job; it’s guaranteed the charges shall come up a lot lesser than what you would have to pay to a group of employed payroll service professionals.

• Factors for considering a payroll service

To free up an entangled array of employee accounts and to find back the peace of mind, there are certain factors to be considered by a hirer before selecting a payroll service. The top of the line payroll systems shall:

- Find out first if you at all need a payroll service that needs to be outsourced.

- Revise, understand and confirm before executing the process.

- Check if the service can be provided online and whether a direct deposit would do you any good.

But if such a payroll service provider seems far from reality, a visit to Respond shall shake your mindset; apart from offering efficient payroll systems and professionals, there is a ton of info regarding consultants who specialize in handling large payroll accounts. And one last thing – it’s not in vain that the other three million came searching here and left with ear-to-ear grins.

Introduction to payroll administration

• What is payroll administration?

A term that takes under its jurisdiction every procedure directly and/or remotely connected to paying the employees in an organization, payroll administration also tracks the working hours of the employees (individually and collectively) so that no one stays underpaid. The other responsibilities payroll administration takes up are:

• Calculating properly all the payable taxes and social security.

• Ensuring the withholding and processing of all the payable taxes and social security correctly.

• Calculating and processing other related deductions, e.g. incentives, commissions, bonuses, overtimes and anything else stated by the employment or the labor laws.

• At times, processing of payments to outsourced work and handling all the problematic issues that might show up while processing, tax filing being a major one.

Does that sound a tough job? Not exactly, when it is about a few employees; the problem shows up when it comes to process the data for a large number of workers. While in the first case, the input of the owner of a company or the accountant proves somewhat sufficient; payroll administration shows its hairy and scary face when it requires keeping track for a large sized establishment. Only a well-planned and efficient payroll administration system shall then allow maintaining the pace.

But then again, it requires creating an altogether separate department run by payroll accountants and headed by the HR, which is again a recurring cost for the owner. There is software alright to get the task accomplished; but often, it required creating an unique payroll system tailored to a company’s unique requirements. Now, that’s again the precious dollars flowing out!

This is where the payroll service outsourcing concept comes into play; outsourcing payroll administration to companies specializing in this job also solves problems like providing management consultancies as well as HR (human resource) assistance – often tailored to meet the needs of the service buyer.

• Procedure of outsourced payroll service

Everything in this world follows a procedure and outsourced payroll administration is no exception either; to help streamlining and running efficiently a business, to free-up tangles related to employee accounts and most of all, to offer peace of mind to the hirer, a company specializing in payroll administration shall:

- Scrutinize if a business needs the payroll service to be outsourced at all.

- Understand and revise the hirer’s needs regarding payroll service if the results are affirmative.

- Check if the service can be provided online and whether a direct deposit is required.

But if such a payroll administration service provider seems like an Utopian concept, a visit to Respond may well bring you back into reality; not only that, you shall find a lot more of them to help you out regarding the HR issues, getting you the professional payroll accountants, tons of info regarding tax filing as well as every intricate detail on handling the employee accounts. At least, it proved so for the lucky three million or so.

Introduction to CPA's

CPA: Accountants who have passed certain examinations and met all other statutory and licensing requirements as per the requirements of the United States federal law and has earned the certification to operate in one of those states.

Why need CPA?

First, let’s see if anything mentioned underneath is one of your current concerns:

- A professional help with tax returns.

- A professional approach to tax strategies.

- Would like to make an investment but no advice from friends, colleagues and relatives seems good enough?
Or,
- Do you need running an audit for your existing business operations?

If your answer is yes to one or more of the questions aforementioned, then a CPA is what you must be on the hunt for. The answer to why comes automatically.

Advantages of hiring CPA

Let us have a look at the common mindset of people as well as certain self-proven facts.

- Several types of tax benefits exist for individual taxpayers. These include IRA contributions, exclusion of taxes from the sale of one’s primary residence, health savings accounts – the list is virtually endless.

- More than half of the population prefers completing the taxes on their own.

- Doing so makes them fail to take certain advantages in the form of tax benefits.

Hiring a CPA or similarly qualified accountants allow a taxpayer to know what benefits or relief he is eligible for; saves extra working hours and most of all, from being on the wrong side of the law.

But then again, not all of such accountants or CPA’s can be relied upon with a word of mouth; for that, one must select a CPA from a source that ensures you get the best value for your money. That’s what Respond is exactly, the meeting point for them all who are losing traction on the financial highway. This is how over three million people gained back control on heir finances; hope to see you joining the happy team soon.

IRS and Telephone tax refund

• What is telephone tax refund?

Think the telephone-tax refund as a payment that occurs only once on a person’s previous year’s federal IT return. The refund returns all the federal excise tax collected on long-distance tele-services. Even bundled services come within the jurisdictions of this refund.

• Why is the government refunding these taxes?

The decisions of the federal court can be held responsible for this change; certain revisions made of recent by the federal court excluded this tax from the jurisdictions of long-distance telephone services as well as from the telephone services offering a flat rate or even those that come with Internet and VoIP. However, the local services are not included into the refund plan.

• What is the procedure to get the tele-tax refund?

For filing an amended tele-tax return, a special short form is to be filled first; it’s the Form 1040EZ-T. Any individual in the low-income group as well as senior citizens can opt for this tax return on telephone bills paid till the previous year. The process is as follows:

• File Form 1040X. Requesting for the refund of the federal telephone excise tax, do the following:

 Fill in the top portion of the form through line B,
 Write the amount to be requested on Line 15 and add “FTET” to the dotted line below,
 In Part II, the Explanation of Changes, write “Federal Telephone Excise Tax”,
 Add your signature and send it to the IRS Processing Center of your State. You can find the address on the Form’s Instruction page itself.

One point to be noted is that if you are requesting for a refund of the paid telephone excise taxes than that of the standard amount, you also need to fill Form 8913, Credit for Federal Telephone Excise Tax Paid. Multiple changes to 2006-tax return are to be followed by filling the form according to the Instructions listed.

The request for standard amount is optional and the easiest way for requesting a refund. A family of four including two dependant children can be eligible for a maximum refund of $60. If you do not want to use the standard amount, then you must figure the refund with the original amount of tax that you’ve paid. Sometimes it results to a much bigger refund. Fill up the Form 8913 and attach the amended returns, if you are looking for this option. It is not necessary to show all the bills for the entire 41-month period, i.e. from March 2003 to July 2006, but you must have sufficient records to back up the refund amount that you are requesting.

Since the business units and non-profit organizations cannot avail the standard amount, they must fill out Form 8913 and request their refund basing on their actual tax paid. This form needs to be attached with Form 1120, 1065, 11205 or 1041 for business organizations. Non Profit Organizations should attach this same form with Form 990-T.


• Who is eligible for telephone tax refund?

Generally, any person or a business unit or a non-profit organization that had paid the tax for long distance calls billed in between 28th February, 2003 to 1st August, 2006 are eligible to request for the refund. It is open to everyone who cleared taxes for landline, VOIP (Voice Over Internet Protocol), or wireless services. But then again, to hear it from the horse’s mouth, no place can be better than Respond; find the right people here who can guide you throughout the process to earn you back the lost dollars, just like the other three million did.

Advantages of outsourcing Accounting services

Ask any firm providing accounting services or tax preparation and they shall tell you about the benefits of outsourcing the jobs. The prime reasons behind bookkeeping firms preferring it this way are:

• Reduced labor costs

Since outsourcing involves the third world countries (chiefly, India and China where every dollar is multiplied several times in their currency), the amount to be paid to a couple of accountants in the first world country can remunerate a large team. These people are also very much proficient in their own fields; hence, it’s less for more.

• Payroll

Since the work is outsourced, the people doing them doesn’t require being on the payroll of the company that is outsourcing. This takes away the burden of granting employee benefits and the related legal responsibilities to the company.

• Lower fixed costs

A bigger benefit for the outsourcing bookkeeping firms comes in the form of cost advantages; it saves big time on the costs that would have been spent otherwise on the operations and the overheads. Investment on an infrastructure can thus be ruled out including buying the expensive software and the respective licenses, employee training and support; all these add up to big time financial benefits for the outsourcing accounting firms.


With all that understood, firms into accountancy need to find a service provider who is reliable and costs less. That way, Respond can help; with a roster that’s virtually endless and a customer base exceeding the three million mark, there is a service provider awaiting every accountancy firm of every budget and every type of accountancy related job; all that is required now are just a few clicks of the mouse.

Receive your refund faster with direct deposit

Desperately need your refund?
Get your refund deposited directly into your account. It has become a normal trend for tax payers to receive their federal tax refunds directly deposited into their bank account.

In the year 2005 more than 50 million people got their federal tax refunds deposited directly into their account.
It is a very fast secure and easy process. It is very much beneficial to the senior citizens and physically handicapped persons.
• Secured mode of payment - As there is no chance of the check getting lost in the middle and also the chance of undelivered mails are eliminated, the direct deposit of the federal tax refund into the bank account is the most secured way of payment. It is the best guard against stolen tax refund.
• Convenience - There is no hassle of going to the bank and depositing a tax refund check.
No need to stand in queue. Easy for the Senior citizens and physically handicapped tax payers.

To get more information you can login in to the IRS website for online resources.

The market is on rough waters

Buy with care or take the long Mutual Fund route.

There was some relief after the sudden recession, nearly after 2 months of bear phase the bull has stuck up its Horns.
Encouraged by the charged US housing numbers and the overnight gains the European and Asian stocks moved forward with some good gains after the months chill.
The JP Morgan chase & Co increased its offer for Bear Stearns 5 times by 10$ approx from $2.
This brought some resuscitation amongst the investors.

How to select an Accountant

Selecting the right accountant is of great importance to any small business. That is because, the accountant can double up as a financial consultant too, and this is valuable resource for the small business. But the sad part is most business owners never thoroughly consider all the factors that need to be, while they are making a selection. This is perhaps because of the fact that most people do not have an accounting background and lack a working understanding of the subject.

Changing an accountant is not an easy job too. And so, it is essential that as the small business owner, you should be making the right decision, the first time.

The best way to start finding an accountant is by asking yourself… “What Bookkeeping Services do I need?”

Why the small business needs an accountant?

Most people need an account just to record the financial transactions of the year and generate the various reports from that such as “Profit and Loss Statement” and the “Final Accounts”. The person also helps the small business in finding out the amount due as tax and filing that tax too.

But the accountant can do much more than that!

A good accountant should be able to help the small business analyze and interpret the financial data and then be able to transform that data into profitable business process. So look out for an accountant who can do this and has the necessary experience in this as well.

Here are certain areas where your accountant should be able to help your small business

Planning your Tax: The accountant’s role should not be limited to just preparing tax forms and filing your tax. He must be able to help you in business planning throughout the year and should regularly advise you on this.

Business Consulting: Can the accountant help the small business grow? Every business has a problem and this is true with the small business too. So a really efficient accountant should be able to work much like a general business consultant and offer specific solutions. The areas of operation can be inventory strategy, pricing, risk management, decisions as to lease or buy, and the person may even help the small business owner on strategic marketing decisions.

Personal Finance Advice: The performance of a small business depends to a great extent on the personal financial position of the owner. And so the accountant should offer personal financial advice because this has an obvious impact on the business too. Long term investment advice such as in retirement planning and investment opportunities always helps the small business owner.

Technology Know-How: The Internet and the availability of software applications and tools offer a great opportunity for small business to benefit from technology. The accountant should be able to use the available technology to provide information and strategic intelligence to the small business owner.

Networking: Can your accountant refer you to others when you need specific help? A person who has strong networking skills knows many people and every small business can gain from this.

What you need to ask before hiring a small business accountant

Do you have your CPA? CPA stands for ‘certified public accountant’. CPA maintains accepted financial and economics knowledge structure and organizes state-administered tests to prove competency and also has periodic certification exams. Yes hiring a CPA accountant might be costlier, but you may not want to take any chances and go with someone like this. So always ask this question.

Do you offer business advice? A really good accountant should be doing more than just filling out forms and filing returns. He should be offering business advice too. So it is necessary to test the credibility of the candidate and the depth of knowledge the person posses One should crss check with the experience of the candidates.

Who are your other clients? Experience is crucial. So always check out whether the accountant has a minimum years of experience or not. If the person has an experience in the sort of business you run, then that is great. The exact nature of the work for an accountant can also vary quite a lot ranging from simple tax filing to more complicated jobs such as Payroll administration to Litigation support to Business Valuation and others. Do remember that the more kinds of jobs an accountant has done indicates the range of his experience.

Are you stamping your space in the local business? Every small business can do with some help and many good accountants can offer a great deal of this. Trace your popularity by checking whether other accountants refer you to clients, businessmen and corporate houses.

Why should I choose you? it’s always a great idea to let the accountant make a case for himself. Look out for the most unique answers and find out how such answers can fit your needs the best.

Here are a few sample questions that will help you select an accountant


• “How will you help my business grow?” Ask for a plan.
• “I need additional funding because my business is growing. Which lenders can help me and how long will it take to get the money?”
• Are you into tax preparation or do you plan the taxes too?”
• “Can you set any benchmarks so that I can track my projects?” An efficient small business accountant can set up a month-by-month goals that can chart the progress.
• “Can you provide other services apart from business advice, gift planning, legal referrals and others?”

It is always a great idea to make a list of all these questions before you are having a talk with the person. Never take a decision unless you have had a conversation with at least 2 accountants.

Once you have got satisfactory answer from someone, try to meet that person face to face before you make up your mind. This is important because the performance of your small business can depend on the efficiency of the accountant and how much, and in which areas, he can help you in. Face to face interactions can often be extremely revealing. Also, find out if the person will work directly on your account or if an employee would be doing so.

Analysis of Income and Investments

For tax purposes, income can be divided as ordinary income and capital gains. Ordinary income includes compensation for personal services such as wages and salaries, business profit and interest income from invested funds while capital gain generally comes from the sale of investment property.

As with any business enterprise, conducted for profit, ordinary and necessary costs associated with day-to-day operation and management may be deducted from income.

Role of Financial Accountant in tax saving

For all your personal and business returns, tax accountant can deliver timely and accurate assistance. The key part of an accountant is to provide tax preparation services and tax help. Here are some of the ways how a tax accountant can serve you in your business decisions:

• Assist you in analyzing your financial statements
• Prepare tax returns and assist with tax planning
• Prepare tax returns and assist with tax planning
• Act as your advisor and sounding board in financial and administrative matters

A tax accountant can help you in identifying ways that can minimize your tax liabilities and other basic needs for tax preparation services as: timeliness; accuracy; customized tax strategy; and managing a complex tax situation.

For your taxation purposes, you should seek out the advice of a licensed tax professional, such as a Certified Public Accountant or an Enrolled Agent. These are highly-trained tax professionals who specialize in helping their clients pay the least tax possible.

What You Need

Following are the documents that you need to provide to your tax accountant, depending on how complicated your tax return is:

• All your tax documents
• Photo identification
• Social Security Cards for yourself and your dependents
• Checkbook for direct deposit of your refund
• Copy of last year's tax return

How to Hire an Accountant

Ask for Referrals: Ask everyone you can think of; family, friends, business owners, financial advisors and attorneys. It will help to ask someone who has a similar tax situation to yours.

Local, independent tax firms are specialized in the tax needs of individuals and small businesses. Call around to at least three tax offices to ask about their prices and how quickly you can schedule an appointment. Ask if the firm has the expertise to handle your taxes. Be sure to ask for a senior-level tax accountant.
Accountants have various ways for the billing depending on the type of service performed. Ask your tax accountant will charge for the services that you are requesting assistance with. An hourly rate is commonly used, but for specific services they can also charge on a regular basis.
Talk to your tax accountant before making any major decision so you will know the tax implications ahead of time; it will save your time later if all of the documents are in proper order. Accountants get paid by the hour, so the harder you make their job, the more it will cost you.

Write down the questions that you want to ask; it helps you to keep your visit organized. Take notes when you are talking with the accountant so you will not have to ask the same question again. This exercise can help you to save money and time.

Ask for a detailed bill for each type of service that you receive, including time and billing rate. This will help to give some clues about what you can do to help save money.

Financial Planning:

A properly structured financial plan enables you to face any inevitable financial challenge. Along with traditional tax and accounting services, professional accountants can help you in overall business valuations and planning, budgeting, estate and gift tax planning and other complex finance related decisions. Financial accountant can help in planning, analyzing, implementing and monitoring all the finance related plans.

As personal financial adviser, he can assist you in any situation that can significantly impact your financial situations. It can be devising estate plans, plans for retirement, insurance planning, risk management and all other financial and legal decisions.

An accountant can evaluate and estimate the financial requirements and can track cash flow sources. Meaningful, well-organized financial records ensure that your business operations will run efficiently on a regular basis.

For everyone who is starting or operating a business should be driven by planning and strategy. If you have an accountant who can efficiently focus on optimizing the profits, plan and implement fruitful strategies then your business can reach to its potential.

In a nutshell, an accountant can assist you to optimize your profitability, by:

• Budget and Planning
• Preparation of Financial Statements
• Cash Flow, Financial Projections and Risk Analysis
• Business and Ownership Structures
• Trusts, Asset Protection and estate Planning
• Family Business Advice
• Succession Planning

You can browse through a list of accounting companies and tax accountants of your area to assist in your tax planning at RESPOND.com

Role of an Accountant in Tax preparation

Every business is required to file with both state and federal government. The filing includes tax estimates, individual and business tax returns, and without proper record maintenance you can be held liable for files and penalties during an audit.

For all your personal and business returns, an accountant can deliver timely and accurate assistance. The primary role of a financial accountant is to prepare and monitor financial statements, reports and sales of the company. The key part of an accountant is to provide tax preparation services and tax help. Following is an overview of how a tax accountant can serve you in your business decisions:

How to find an Accounting Service

Accountants help your business run smoothly by increasing your profits and reducing your taxes. Accounting firms and accountants help in recording and interpreting financial data that facilitates better business decisions.

Accountants and accounting firms help in various tasks such as auditing, tax, and all other consultations related to the financial services. Small business organizations generally prefer to work with some experts from outside to deal with their financial and legal documentation.

Organizations find it very beneficial to use the accounting services provided by the accounting firms or accountant rather than hiring a professional for the job. An outside accountant generally proves to be a trusted business adviser and can act as a facilitator for the success and growth of your business.

To select the perfect accountant or the firm is a very important decision. The accounting service should have the basic integrity and expertise in handling your entire accounts related task. The accounting service or firm that you hire for your business should be able to monitor your finances periodically. It should be able to provide you the authentic and useful information regarding your specific business requirements.

Accounting & Bookkeeping

I decided to blog these as I am going to appear for my second semester of my CPA exam, well I am really very tensed about the paper it is one of the toughest that I am going to face. I also could not do much study as I was busy with Vishnu and having a fun time.
My exam for Certified Public Accountants is nearing..and I have to go to the carnival. My Conscience says NO NO...oh god help me....I am no longer a teenager playing pranks...
Anyway I will let you all know about the details of my Accountant course, Financial Accounting and Bookkeeping Services.
I am doing my certification from American Institute of Certified financial Accountants.
It is a 2 years course and I am doing my second semester and completion I will become an accountant.
I always dream about being a Financial Ad visor to a multinational firm, where my work will not only be confined to tax calculations and balance sheets. I would take greater steps in tapping in financial resources for the company, making the yearly budget for expenses and in true sense can become a financial consultant by tracking business financing and setting an optimum output level.