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benefits start-up can redeem from accounting

Benefits Startups Can Redeem in Accounting & Bookkeeping

What are the benefits startups can redeem in accounting? 

Warren Buffet once said, “Accounting is the language of business.” 

Now suppose Mr. XYZ starts a company. He has the funds to run his startup. Also, a robust business plan with sound research and strategy is done. But, he is not aware of the language of business. In simple words, he is unaware of the benefits accounting can redeem. To our surprise, several entrepreneurs and business owners like Mr. XYZ. Around 60% of small-business owners feel they are not knowledgeable about accounting and finance. 

What is accounting?

A company needs to keep track of all the expenses and income. In accounting, you need to maintain records of all financial transactions. Eventually, it leads to sound cash flow management. Accounting starts with drafting a strategic budget. Secondly, you develop a bookkeeping system. Then, you create a trustworthy payment gateway. After which, you set up a payroll system.

Last but not least, you prepare financial statements. It shows an accurate picture of your business’s financial health. Accounting holds much more than the before stated. Therefore, we are unfolding the benefits that accounting has in store for startups. 

Free Woman in Black Tank Top Writing on White Paper Stock Photo

Why is accounting vital for your startup? 

1. Bookkeeping

According to Wasp Barcode, around 21% of SMB owners admit not knowing enough about bookkeeping. But you must know bookkeeping leads to better and informed financial forecasting of a company. As a result, you can strategically draft your business plans. Secondly, you can access your business’s accurate accounts and cash flow. Eventually, this helps in receiving payment timely. Thirdly, the tedious nature of bookkeeping increases the chance of higher human errors. So many entrepreneurs have started looking to outsource their bookkeeping to experts. 

Outsourcing your bookkeeping will lead to secure & reliable financial health. They also take care of your monotonous task of bank reconciliation. Since monthly reconciliation keeps your books clean and brings countless benefits, maintain a clean general ledger and prepare accurate financial statements for your business. Lastly, an outsourcing accounting firm will provide unlimited consultations.

2. Payroll System

You need to set up a payroll system to pay your staff on time. You often miss the IRS deadlines and become unable to pay on time. It can lead to low morale and legal difficulties. That’s why you may require a payroll service provider. You outsource your payroll system to a payroll service provider. 

You can get the best payroll solution that fits your startup. Your payroll checks are printed on time. Additionally, a report of employees’ vacation, sick days, new hires, etc., is always ready. You don’t need to worry about the Free IRS and State tax reporting. Lastly, you get access to reports that the government agencies always require. A payroll service provider eases things for you. As a result, you spare more time for your primary operation. 

3. Cashflow Management

Cashflow management is one of the main benefits of accounting. While adequately maintaining books, you are also paving the way to positive cash flow. On the contrary, if books are not maintained accurately, it leads to a cash crisis. Due to the crisis, entrepreneurs shake hands with a cash management service provider. 

cashflow manager gains a depth of knowledge of your cash flow. They build an accurate cash flow projection. Plus, they provide cash collection acceleration techniques. They give the best-proven effective collection and payment policies as well. Finally, yet importantly, they help you get the maximum rate of return on your idle cash. 

4. QuickBooks

By now, you have read enough about outsourcing various services. But what’s that an accounting outsourcing firm possesses but a startup doesn’t. It’s nothing but accounting software. The cost of installing and updating accounting software is huge. Therefore, startups and small business owners outsource accounting and bookkeeping. There is various accounting software like- QuickBooks, FreshBooks, Xero, etc. 

QuickBooks is the ideal business accounting software for small to mid-sized business owners. Primarily, it saves time on bookkeeping and paperwork by automating the tasks. Secondly, it generate vital financial reports. Thirdly, QuickBooks can be tailored as per your startup requirement. Lastly, a virtual accounting firm integrated with QuickBooks provides QuickBooks Training

If you are still looking for more reasons, click here to know why you must choose QuickBooks.

Conclusion

In a startup’s budding days, owners must face a host of problems. We at SKB Accounting help you kickstart and redeem the enormous benefits of accounting. The most significant benefit of shaking hands with us is that our estimates grow only with your startup’s growth. So, schedule a call with us now and get relief from the accounting stress. 

 

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How to keep your books cleaned?

How to keep your books balanced?

Accounting Tips for Small Businesses to Keep the Books Balance

 According to Wasp Barcode, around 21% of SMB owners admit not knowing enough about bookkeeping. If you belong to that 21%, you do not need to worry. We will give you a sneak peek at how you can keep your books balanced.

Why keeping your books balanced is essential? 

Before jumping, let us understand the why. Accounting and bookkeeping are as crucial as the core operation of your company. Therefore maintaining balanced books becomes more important. Firstly balanced books lead to better and informed financial forecasting of a company. As a result, you can strategically draft your business plans. Secondly, you get access to your business’s accurate accounts and cash flow. Eventually, this helps in receiving paying timely. Thirdly, the tedious nature of bookkeeping increases the chance of higher human errors. So, reviewing your books at regular intervals helps in identifying that errors. Also, it saves organizations from bigger financial blunders. Therefore, we present the best accounting tips for SMB owners to maintain balance and clean books. 

Tips to Balance your Books

  • Separate Personal and Business Accounts

Often new SMB owner or entrepreneurs don’t distinguish their personal and business accounts. If you are one of them, you might overlook the critical business transactions. Maintaining separate personal and business accounts makes it easier to determine your regular spending. This way, keeping books balanced becomes easier. Also, keeping a separate credit card for your business expenses separates personal expenses. 

  • Monthly Bank Reconciliation

Bank reconciliation requires you to compare the cash balance of your bank statement to that of the company’s records. Firstly you need to identify and highlight the difference between both statements. Secondly, you must ensure that all interest income and bank deposits are added. Thirdly, subtract the bank fees & service charges. Lastly, it would help if you calculated & compare the balance of both bank & company records. Monthly reconciliation keeps your books clean and brings countless benefits. All these recorded expenses help in tax savings. Also, it is cost-efficient and guards the business against fraud. 

  • Maintaining Clean General Ledger

The general ledger is the core of your company’s financial records. These records constitute the central “books” of your system. Since every transaction flows through the general ledger, a problem with your general ledger throws off all your books.

Reviewing your general ledger system regularly allows you to hunt down discrepancies such as double billings or unrecorded payments. This way, you can fix the discrepancies in your books. As a result, your books are always accurate and balanced.

  • Clean up your books at regular intervals 

Cleaning up your books at regular intervals will help you identify and minimize errors in the beginning. Also, it deters employee fraud, embezzlement, theft & dishonest behavior against the business from both outside and inside. It will generate accurate amounts in account payable, account receivable, etc, which need to be considered before purchasing. Eventually, you make an effective decision as per the business’s financial health. With transparent cash flow, it allows you to track profit & company performance.

Additionally, it saves your business from accounting blackholes. Besides, it enhances your internal control as you are not required to rush to correct an incorrect accounting method or some mismatched balances.

  • Record Cash Expenses

Being an SMB owner, you need to track all expenses to keep your books balanced. Among the hustle-bustle of the business world, you may forget to track your cash expenses. But it’s essential to deduct them from your income at the time of taxes as it leads to accurate and enhanced financial analysis. So, it would be best if you always asked your vendor for invoices.

  •  Create a cash flow statement 

A cash flow statement gives the picture of your business’s cash inflow and outflow. Making a cash flow statement weekly or monthly can help you anticipate expenses and allocate income. Besides, it helps maintain optimum cash balance and even generate more cash. Moreover, it helps short-term planning for the business and leads to better cash flow management. 

  • Understand the difference between Invoices and Receipts

Invoices and receipts are often considered the same, and that’s where you go wrong. An invoice is a bill you send to the customer once they receive your service or goods. It consists detailed outline of all the deliverables. It helps you ensure that the payment is received timely. However, a receipt is a proof that a transaction occurred, and you provide the receipt to your customer once a transaction is complete. So to balance your books, you need to know the difference between the two.

  • Leverage Technology

Balancing or keeping books accurate requires time and concentration. It leads to irregular checking of the books. Besides, the process is complex and overwhelming for anyone. That’s why the whole world is leveraging technology. Installing a cloud-based software or app relieves you from the monotonous and tedious bookkeeping and accounting job. Still, you must not forget to keep track of receipts.

Conclusion

Why wait for tax season when you can outsource your bookkeeping service with us. Get on a call with us and get your books cleaned as we offer accounting and bookkeeping services integrated with Quickbooks

 

 

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Accounting Tips To Smoothly Run Your Restaurant

Accounting Tips for Success of Your Restaurant

5 Effective Accounting Tips To Smoothly Run Your Restaurant

Did you also start your own restaurant to follow your passion? 

Then you might have or are facing hurdles to manage your restaurant’s accounting. Don’t stress out pal because, as per a report, around 52% of restaurants face the challenge of high operation costs. 

A part of this high operating cost is your daily accounting. Restaurant accounting includes keeping a tab of the restaurant’s finances and drafting the budget accordingly. It is one of the indispensable aspects of running a restaurant.

Restaurant Accounting is different from other industries. Accurate and true finance reports are necessary for any business’s success. But for restaurants, it becomes more important as it relies on historical data and current records to forecast and make business decisions. The profit margins in the restaurants are very thin. Due to this reason, it becomes vital to pay attention to your accounting process. 

That’s why we bring you the 6  effective accounting tips to smoothly run your restaurant. 

  • Understand the language

If you wish to excel in your accounting game as strongly as in your kitchen, then you must learn the language of accounting. Everyone is not a trained accountant, that’s why you should start by understanding the basic terms. For instance, debit, credit, balance sheet, cash flow, prime cost, profit & loss, etc. In the beginning, it may feel heavy-duty. But, grasping their meaning, differences, and application in accounting will give you essential financial insights into your restaurant. However, if it feels onerous you can hire or outsource an accountant. 

  • Keep track of your Bookkeeping

Bookkeeping should be your new habit. Firstly, you can create a cash-flow projection to calculate the estimated revenue after expenses. It builds the foundation for your restaurant’s budget. Secondly, you must maintain regular financial records, for future IRS audits. You can consider buying restaurant bookkeeping software as well. Thirdly, as a restaurant owner, you must track your inventory on a weekly basis. Lastly, maintain a sound ratio of Cost of Goods Sold (COGS). It helps in setting better pricing and sales goals and making your restaurant profitable.

  • Choose the right point of sale system

You must invest in the right Point of Sale (POS) System. It will help you understand where your money is going. A POS system offers you a detailed analysis of your accounts via insightful infographics. However, many managers are unaware of the benefit of intertwined POS and accounting systems. Linking your POS system and accounting system helps you track inventory and labor costs, methods of payment, etc. There are various POS systems specifically designed to manage all facets of a restaurant. For instance, Toast POS, Lightspeed POS, ShopKeep, Square, etc. 

  • Get your restaurant insured

Understanding financial terms will definitely help you comprehend the accounting department. But, it is still exposed to financial troubles namely, property damage and lawsuits. For instance, your kitchen can catch fire and destroy the expensive equipment, or a customer slips on the restaurant’s wet floor and breaks his leg. Any of the instances could lead to financial calamity. Therefore, you must get your restaurant insured. Many small business insurances are available for restaurants such as commercial general liability and restaurant insurance. This insurance offers general liability and property damage coverages. You can consult an insurance agent to identify and secure the specific risk associated with your restaurant.

  • Consider Outsourcing your Payroll

Paying your employees always seems like child’s play. However, it includes deciding a pay period, number & type of payments, classifying employees & withholding taxes. With the host of tasks at hand to do, properly handling payroll becomes tough at times. Also in case of mistakes in payroll you have to beat liability issues and high penalty fees. Besides all of these, it’s hard to keep up with the dynamic workforce laws.  That’s why it is advisable to outsource your payroll system.

 

The restaurant industry varies from other industries in terms of profit margin. Eventually, with the success and popularity of your restaurant, accounting often gets tough. That’s why we empower you with accurate accounting and bookkeeping services. Not only this, we help you with payroll and strategic business planning while you focus on growing your restaurant. 

That’s why we bring you the 7 effective accounting tips to smoothly run your restaurant. 

 

-by Dipali  Nishad

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Importance of Bank Reconciliation Statement

Why monthly bank reconciliation statement is important?

Why monthly bank reconciliation statement is important?

 

Mr. XYZ of your company erroneously put a $100 invoice in accounts payable. Instead of recording it in accounts receivable. In simple terms, he recorded it as an expense. 

Sounds like a common accounting error, right?

Now replace $100 with $10,000 and imagine Mr. XYZ made the payment. Your heart must have skipped a beat. This was an error of entry reversal. Similarly, there are many accounting errors. For instance, error of principle, exchange, omission, commission, duplication, etc.

In order to solve these errors, you need to prepare a Bank Reconciliation Statement

 

What is a Bank Reconciliation?

 

BRS is a summary of banking and business activity that reconciles an entity’s bank account with its financial records,” Investopedia stated. It compares your records to the bank records. Besides, it helps to discern exact bank balances on a certain date. It addresses accounting problems in real-time. 

Infrequent reconciliations leads to frauds, unauthorized withdrawals, and bank errors. Moreover, chances of bouncing cheques increase. Thereby, your relationship with clients, suppliers, and partners strains. Therefore, the fee and payment term also increases. 

 

What is the process of the BRS?

 

Initially, you need to compare the cash balance of your bank statement to that of company’s records. If they match, voila. Otherwise, the monthly BRS will come into the role. 

Firstly, identify and highlight the tiniest differences between both statements. For example, you may omit a transaction. But, the same can be there in the  bank’s statement. Secondly, ensure you have added all interest income and bank deposits. In case, some deposits are in transit (recorded in your company’s record), add that in the bank statement’s cash balance. 

Usually, bank fees & service charges, or outstanding checks are in the bank statement but not in the company’s record. In the third step, subtract these fees and charges. Also, consider the issued but not yet cashed cheques to a third party. Subtract the cheque amount from the bank balance. 

Lastly, calculate & compare the balance of both bank & company records. If the balances don’t match, either there is the chance of fraud or some accounting errors. This process increases the accuracy and efficiency of accounting department. Here are the 4 reasons to convince you that a  monthly BRS shields your business.

 

Why is monthly BRS important?

 

  • Validates cash flow

Tracking expenses is important to ensure that a business is earning good profits. One needs to carefully record all the expenses such as rents, utilities, bank charges, etc. In case bank service charges have increased, bank reconciling will help you ascertain the effect on cash flow. Moreover, lenders and investors consider your BRS to evaluate your financial stability.

  • Recorded expense help in tax savings

While calculating tax to be paid at the end of each year, all you look for is recorded expenses. Monthly BRS helps to keep track of all the expenses like depreciation, travel expense, and other information. As a result, these recorded expenses help in the availing of deduction. 

  • Save Money

How many subscription and their timelines can you remember every month? It seems hard to keep an eye on every new subscription in the tech-driven world. But monthly BRS reminds, records and keeps a tab of all such expenses. They help you in discovering all those forgotten free trials which are now automatically charging you every month.  

  • Guards from Fraud

When an employee alters or steals a cheque, mostly a BRS process identifies it. So, you should have a separate employee to reconcile both the bank statement and your records. Moreover, a fraudulent charge on the company’s credit card alerts of any loss of your credit card or its credentials. So a monthly bank reconciliation secures you from frauds before losing a great amount.

 

Being a business owner you have a lot to do on your plate. Finding time to do monthly bank reconciliation can be too difficult.

At SKB Accounting, we monthly reconcile your business to keep your bank account, accounting  up-to-date. To know more about this, schedule a meeting with us now. 

 

-by Dipali Nishad

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Are you still thinking about outsourcing your Accounting & Bookkeeping?

-By Dipali Nishad for SKB Accounting

In the modern tech-driven world, outsourcing has been a hot trend.

U.S. outsourcing statistics suggest that outsourcing in the financial services market will continue to rise by almost 7.5% annually. The prime reason businesses outsource is cost reduction and increase the efficiency of the business.

Yet many small business owners try to manage all possible business operations in-house and don’t take advantage of the tremendous benefits of outsourcing an accounting & bookkeeping firm or a professional.

Here are the 5 ways which prove that outsourced accounting is a boon for your business:

  1. Get access to Latest Technologies: An outsourced accounting team is equipped with the latest software, accounting tools, and trends. You can enjoy up-to-date technologies at a price that suits your pocket. In addition, you get relieved from keeping a tab of new versions and updates. Moreover, you are not required to conduct the latest software training sessions for existing employees.
  2. Offers Actionable Financial Reports: Outsourced accounting firms examine your meticulous records and expenses. They give actionable financial reports like financial analysis, sales performance, ROI, monthly take home, and many more. The scrutinized financial report helps the senior management take informed decisions, generate & forecast sales estimates, and win a competitive edge in the industry. In addition, it helps you identify the potential clients, maximize business profitability, growth & expansion plans.
  3. No risk of Data Loss: These days accounting firms use the latest cloud-based software to access the data at one click from anywhere via the internet. Eventually, this means that your financial data is well protected and secured. They also examine the internal working of the company to increase productivity, enhance security, and secure assets from any possible fraud. Communication is done through entry emails which are hard to decode.
  4. Professional Assistance: Accounting firms have the best and expert professionals. They offer the best-fit solutions as per your company’s structure. Besides this, they provide actionable and valuable financial data which can be used strategically to grow your business. By outsourcing accounting, you can focus and scale up your business’s primary operation. On top of this, your competent employees don’t need to waste their talent in tedious desk jobs of inserting data.
  5. Time & Cost-Effective: Outsourcing accounting eliminates the cost and time involved in hiring and training an in-house accounting team. This team is your one-point contact for all queries and concerns. They are accountable to all the bookkeeping services. Therefore they identify and take charge of any errors. By eliminating all paperwork, you gain more time to build better customer and employee relationships. 

Reach out to us at: https://skb-accounting.com/ and outsource all your bookkeeping needs to us.

 

-by Dipali Nishad

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Virtual CFO Services: Unmasked

By Dipali Nishad for SKB Accounting

What is a Virtual CFO? 

In the cut-throat competition world, many businesses want to focus on their primary operations and get relieved from the financial stress. So, they outsource a Virtual Chief Financial Officer (Virtual CFO), which can be either an individual or company that offers the services of a CFO. 

 A virtual CFO is an off-site, part-time CFO who offers his expert finance strategies.  Especially, the small business or startups who cannot afford to hire full-time CFOs outsource a virtual CFO. As they always need finances to sustain, expand and forecast new opportunities. Moreover, a virtual CFO helps with system optimization & reporting, profit maximization, raising capital and preparing transactions among others.  

Its numerous benefits have skyrocketed the demand for Virtual CFOs. To understand why, let’s dig a little deeper.  

  1. Provides best-proven strategy
    All businesses need an efficient business model comprising industry forecast, internal & external resources, consumer demographics & behavior, financial strategy and competitive positioning.Virtual CFOs having full-stack capabilities provide the best resources and information. It makes your business more flexible and proactive to adapt to the dynamic industry.  They have detailed knowledge of analytics and what factors lead to changes in your industry. In the modern world, virtual CFOs directly help your other departments concerning the financial benchmark of your business. In addition, they do standard financial planning and analysis. With years of experience, they accurately analyze the available data and provide a prompt actionable plan for your business. They help the top management in designing the best strategies for companies growth.
  2. Financial Planning
    Financial planning is one of the most important factors behind successful businesses. Especially for startups and SMBs, who always seek funds for expansion and growth. That’s why taking assistance from a CFO becomes vital. Not having a financial plan can cause chaos and failure. The virtual CFO makes financial planning feasible for all large and small businesses. Data related to your business operation is used to create financial plans for all cash management, borrowings, stock offerings and restructuring. With a virtual CFO, you get to know about the sources your business can use to generate funds, burn rate, the pace at which company goals need to be achieved and relocation of resources in a manner that doesn’t hamper the company’s growth.They help you develop a financial and strategic plan with insightful data. This will help you in profit maximization. Moreover, it also leads to better decision making with better and cost-effective operational efficiency.
  3. Tax Planning
    As a business owner, you wouldn’t want to make a mistake in tax filing. Apart from the financial loss, it can also harm your goodwill. Therefore, tax planning is crucial and a virtual CFO can help your business. They have the expertise & are updated with all amendments, rules and regulations of the government. CFOs help in the analysis of tax advancement, capitalization, advice on financial issues, increased tax positions and creating assets. They uncover money leaks, tax deductions and business recruiting. Eventually, they provide help in your overall tax liabilities and financial issues.
  4. Scale Up the Company
    The virtual CFO assesses scaling up your business by tracking in which direction your business is going. They use the latest cloud-based software to enhance the timeliness and quality of financial information. They provide better and on time forecasting, analysis and financial reports of your business. Eventually, they offer actionable and valuable financial data which can be used strategically to grow your business.
  5. Cost & Time Effective
    When you hire a full-time CFO, a lot of costs are invested in the hiring and training process. Whereas, a Virtual CFO can be recruited as per your wish. You can work with an experienced and professional CFO at a very less amount than the salary of a full-time CFO. Since the Virtual CFO works with a wide range of industries and businesses, their diverse experience is no less than a gold mine for your business. They always keep a tab of your business’ previous handled financial activities like bills, budget, paperwork, etc. and save a lot of time for business. Therefore virtual  CFO services are cost & time-effective. 

We at SKB Accounting offer Virtual CFO Services and provide detailed reports and analysis that will help your business grow. Schedule a meeting with us now and onboard your person Virtual CFO at economical prices.

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