Taxes. Like em or not, they are with us, both for public and governmental good. Preparing for year end taxes makes great sense for both individual taxpayers and businesses. Protecting income and saving tax expenses are good reasons to follow some valuable year end tax tips. Reasons to Pay Attention to Tax Deadlines Paying attention to year end tax deadlines offers these benefits: Planning ahead gives every tax preparer adequate time to assemble and put all the right documents in…
Accounts receivable is the amount of money owed to a business for sales of goods or services on account (on credit) and it represents an amount of cash that will be received at a near-future date. This category of current assets is typically among the largest assets on a company’s balance sheet. Cash flow is frequently described as the “lifeblood of a business” and accounts receivable can aptly be called a key part of the “blood flow.” Why are Accounts…
Proper financial accounting is foundational to the success of every business. Yet the financial responsibilities and functions of an enterprise can be daunting, especially for small businesses. Typically, there needs to be at least one bookkeeper who handles the day-to-day financial functions including entering data and making reports, sending invoices, recording payments, managing accounts payable and receivable, making payments, running payroll, and paying state taxes. An accountant operates at a higher level, verifying the accuracy of the bookkeeper’s work, managing…
Every business owner’s favorite: the 1099 filing requirements. Business owners must understand there is a new form when preparing 1099 forms this year. Every year business owners must file a 1099 form reporting nonemployee compensation paid to subcontractors, etc for all types of services. Here are four things you should be aware of as a business owner: Many businesses chose to ignore this filing requirement and just not file 1099s. Just be aware the maximum penalty for not…
Cash flow is simply the flow of funds into and out of a company. The cash flow statement is the essential summary of the cash coming into a business including sales, collecting accounts receivable, investments, and loans. And it reflects the funds going out of a business including accounts payable, operating expenses, payroll, sales and marketing expenses, and loan repayments. Cash is a current thing, not a yesterday thing, and not a tomorrow thing. As American businessman and author Robert…
We’ve all heard the old quotes about time like “Time waits for no one,” and “There is no time like the present.” It is true that time matters a lot. And in business, the time taken to plan and prepare in advance is critical to achieving success. It is amazing to think that the autumn season is already upon us and that means that it is indeed time to make important financial preparations as the end of the year approaches….
In recent weeks taxpayers have received many IRS notices stating they have not paid their 2019 taxes even though the tax was timely filed and paid. It seems during the pandemic when IRS workers were off, the IRS accumulated unopened mail in trailers set up outside the IRS facilities. With the electronic filing system the actual tax return and balance due goes into the IRS computers immediately when efiled. As a result the system is generating balance due notices…
Business success requires a lot of things including a mission/purpose, excellent products or services, good people, and good operations. But it also requires profits. The old saying “No margin, no mission,” means that every successful company must have good financial and accounting practices that help it to achieve sustained profitability. As financial and investment expert Warren Buffett said, “Accounting is the language of business.” That “language” requires monthly reporting, quarterly, and annual reports. Good information is both accurate and timely,…
The primary purpose of every business is to make money; to generate a profit. If there is no return on effort and on a business’s investments, the business will surely die. There are clearly two major ways to generate profits: increase revenue and decrease cost. A key solution to control and reduce business cost is outsourcing, a widely embraced practice where a business hires a party outside the company to perform services that could otherwise be performed inside the company….
There is an old saying that “Knowledge is power.” That is certainly the case for every business. No smart business owner should ever guess what his/her cash balance is or take a rough “shot” at last month’s income or operating expenses. No! A key to success in business is careful preparation and wise use of quarterly reports, a summation of the financial statements. As Warren Buffet stated, “You have to understand accounting and you have to understand the nuances of accounting….how…
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