Artificial intelligence is reshaping many professional fields, including accounting and bookkeeping. As small business owners, we are always looking for ways to stay ahead of the curve and keep up with the latest trends. With the advancement of artificial intelligence (AI), it is important that we understand how this new technology will affect our businesses. In the past, bookkeepers would have to manually calculate and input data into their computers, but now they can rely on AI technology to do it for them. This means that businesses will save time and money, as well as avoid errors from human error that happen during data entry. Let’s explore how AI is revolutionizing small business, bookkeeping, and the accounting industry!
Benefits of Artificial Intelligence in Accounting & Bookkeeping
There is no doubt that AI is changing the landscape of business, with some experts predicting that up to 40% of jobs will be replaced by robots and AI in the next decade. While this may seem like a negative thing, it could actually lead to increased efficiency and productivity in the workplace. Fortunately, AI is not going to be replacing humans at least not any time in the near future. AI has the potential to be integrated into the day-to-day tasks of forward-thinking accountants, streamlining tedious processes, and reducing the chance of error.
AI is an exciting prospect for small businesses because it allows owners to focus on their knowledge-based duties, leaving the repetitive tasks to the technology. Rather than wasting time with monotonous tasks such as data entry, accountants can focus their efforts on all the work that requires a human touch, such as analyzing and interpreting data and using that information alongside human intuition to make educated decisions on how the company should proceed.
Additionally, AI has the potential to make accounting and bookkeeping more efficient and productive. In a traditional bookkeeping setting, accounting mistakes may go unnoticed. AI can detect errors immediately, ensuring that your books are always accurate. Machines may also be able to provide real-time financial insights, which often take accountants extra time and effort to discover.
AI Can Match Payments and Invoices
Although AI integration is naturally going to vary depending on the unique needs and preferences of accountants, clients, and companies, some accounting processes are more likely than others to be handled by AI and machine learning. One major example is clearing invoice payments.
Currently, dealing with payments from multiple invoices can be quite difficult, often requiring the accountant to dig through and match invoices or contact the client for clarification, a process that can be very time-consuming, especially when multiple clients and invoices are involved. Machine learning allows AI to analyze the data and clear out invoices or generate new ones.
AI Can Help Businesses Remain Compliant
Expense submissions should be accurate and compliant with company guidelines. AI can detect inaccuracies and flag improper submissions for removal or human approval. This real-time auditing would be quite tedious for human accountants. Using machine learning, AI can learn the company’s policies and analyze data in bulk to ensure that there are no discrepancies.
AI Can Analyze Data and Perform Fast Risk Assessments
AI can also perform large-scale tasks that would be virtually impossible for humans to complete in a timely manner. For example, AI can analyze the data from every accounting project ever completed in your company. It can then provide valuable insights on how to proceed with a potential project idea most effectively or even recommend that the company scraps it all together. While a human accountant might arrive at the same conclusion, it would take countless hours to pore through the data. AI allows for fast risk assessment, helping businesses to move forward on a more efficient timeline.
Consultance & Artificial Intelligence in Accounting
Artificial intelligence is becoming a major force in the bookkeeping and accounting world. For more information about small business accounting and how your business may benefit from AI, contact Consultance Accounting services. Consultance accounting provides the very best technology-based and operationally integrated accounting solutions for the small and medium-sized business market. From forecasting revenue projections to streamlining categorization and organization, Consultance using the latest technology gives you the competitive edge, and it is only a matter of time before AI becomes adopted widely.
The first commercial cryptocurrency transaction was in May 2010… for a pizza. Seven years later, a crypto millionaire purchased a $200,000 Lamborghini Huracan by cashing in 45 bitcoins. The largest real estate sale occurred the following year when a Miami mansion was sold for 455 BTC. Most recently, Russell Okung, a former offensive lineman for the Seattle Seahawks, requested half of his $13 million contract be in Bitcoin. Some major corporations that accept crypto currency are Starbucks, Home Depot, Overstock, Tesla, Microsoft, Amazon, Visa, PayPal, Coca Cola, Whole Foods, and Expedia. It appears that crypto is everywhere and everyone is jumping on the bandwagon. However, there is still confusion surrounding this new currency. Consultance Accounting has created this informative blog with resources in hopes to put your mind at ease and answer some questions about cryptocurrency basics, cryptocurrency accounting, crypto accounting software, and more.
What is Cryptocurrency?
Investopedia explains, “A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.”
Cryptocurrency is not tangible. It is a digital representation of value and exists in the form of data. It is a form of payment exchanged for good and services.
*Think about going to an arcade as a child. In order to play you needed to have certain coins or tokens to put into the arcade games. Handing the cashier money and in exchange receiving a specific amount of game tokens used to play the games, is essentially the concept of cryptocurrencies.
Why is Crypto Popular?
Crypto allows individuals to take complete control over their assets because it is not issued or controlled by a central authority or by the government. It is a decentralized market meaning that technology allows investors to deal directly with each other instead of operating in a centralized exchange. Virtual markets that use decentralized currencies (cryptocurrency) are an example of a decentralized market. A decentralized market uses various digital devices to transmit, and show ask prices or bids in real-time. This allows buyers, sellers, and dealers to be located in different places and still able to conduct transactions.
“As decentralized platforms, blockchain-based cryptocurrencies allow individuals to engage in peer-to-peer financial transactions or enter into contracts. In either case, there is no need for some trusted third-party intermediary such as a bank, monetary authority, court, or judge. This has the potential to disrupt the existing financial order and democratize finance. The size of the cryptocurrency space has grown exponentially in the past decade, with new innovations and a collective market cap of nearly $2 trillion”
Types of Cryptocurrency
There are over 12,170 different cryptocurrencies as of September 2021. The most popular are Bitcoin Cash (BCH), Cardano (ADA), Ethereum (ETH), Binance Coin (BNB), and Tether (USDT). Other valuable cryptocurrencies are Polkadot (DOT), Stellar (XLM), Litecoin (LTC), Chainlink (LINK), Dodgecoin (DOGE), and Monero (XMR).
There is a lot of confusion regarding accounting for cryptocurrency especially for businesses. Generally Accepted Accounting Principles do not currently address cryptocurrency and it is not considered cash or inventory but for federal tax purposes it is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency. Crypto can be indefinite-lived intangible assets, accounted for under ASC 350. Crypto is noted on the balance sheet at cost (whatever you paid for them). It is not amortized but are tested for impairment annually (or more if suggested the asset has become impaired). The impairment is the difference between the carrying value on the balance sheet and the fair value. More confusion arises because a business can write crypto for losses, but not for gains.
Crypto Accounting Software
Gilded, a B2B blockchain payments and accounting software provider, has released Compass, a solution that enables advanced mapping capabilities between blockchain wallets and a business’s general ledger.
Compass integrates with Intuit’s QuickBooks Online. Gilded aims to unify the worlds of traditional finance and digital assets. With Gilded, QuickBooks Online users can reconcile cryptocurrency transactions alongside fiat transactions in QBO.
The market for Initial Coin Offerings (ICOs) and digital assets are growing in popularity. Businesses and individuals are using ICOs to raise capital and investors are looking for new investment opportunities. With any investment there are risks. Before investing make sure you do your research. Investigate the individuals and firms offering the investment and check out their backgrounds on Investor.gov and by contacting your state securities regulator.
Consultance Accounting has knowledgeable technologically advanced cryptocurrency accounting experts. Our professional accountants work with crypto clients and help them succeed at every business level. Consultance guides clients every step of the way. The Consultance team is made up of highly experienced specialists, with expertise that includes accounting and bookkeeping, state-of-the-art accounting technology, compliance and ethics, financial analysis, process and systems re-engineering, risk management, and accounting system optimization.
Consultance Accounting provides a broad offering of accounting services and tools to improve efficiencies and decision-making in a customizable format to meet each client’s specific needs. We are experts in our fields and are fully certified in the technology platforms we offer our clients. What makes Consultance different is how we deliver our services. Through our people, processes, and technologies, we have proven our unyielding commitment to exceptional client service and knowledge from industry experts. Contact us today for more information about any of our services including cryptocurrency accounting.
Accounting Methods, Glossary, Financial Statements, & Fundamental Accounting Principles
Business owners take on many different responsibilities and every industry and business is unique. Owners may take care of the marketing, sales, management, staffing, customer service, daily operations, planning, and financial aspects of the business. Each industry and aspect of business has its own lingo that is necessary to effectively communicate. Sometimes accounting terms can be overwhelming but knowing the basics are essential for overall business success.
To assist business owners with financial operations, we have created a financial and accounting glossary which includes accounting methods, financial statements, important accounting terms, and fundamental accounting principles.
Accrual Basis Accounting
Public companies and many businesses and professional services in the United States are required by law to use accrual basis accounting. The main concept of accrual accounting is not when the money changes hands, but when the money is earned. Basically revenues are to be recorded when the customer is invoiced and expenses are to be recorded when they are incurred, rather than when the actual payments are made. Accrual basis accounting gives a more accurate picture of the long-term health of the business.
Cash Basis Accounting
Cash basis accounting is a simple method of keeping track of revenue and expenses. Many people use cash accounting in their daily lives when balancing a checkbook. The main concept of cash accounting is the actual flow of money. Revenue is recorded when the customer makes payment and expenses are recorded when paid out. This method is often used by sole proprietorships and small businesses that do not keep inventory. If the customer has credit terms, the revenue is not recorded until full payment is received, regardless of the invoice date. Similarly, if the business incurs an expense on credit, the expense is not recorded until the invoice is fully paid.
A balance sheet is a snapshot of a company’s financial position (assets, liabilities, and equity) at a particular point in time. This is the master record of a business’ finances and shows what your business owns and owes. It is organized into two main columns, with assets in one column and liabilities and equity in the other. The two sides always equal each other.
Assets = Liabilities + Equity
Cash Flow Statement
The cash flow statement measures whether your cash balance grew or shrank over the past period. It shows the movements of cash and cash equivalents in and out of the business. The cash flow statement is an important tool for evaluating business health, as it is possible to show a profit on the income statement while draining cash from the business.
The income statement (also known as a Profit and Loss Statement) shows your revenues, expenses, and profit for a particular period. It is a snapshot of your business that shows whether your business is profitable at that point in time (month, quarter, year, whichever time you pick).
The basic equation of the income statement: revenue minus expenses equals profit or loss.
Statement of Owner’s Equity
The statement of owner’s equity (also known as Statement of Retained Earnings or Equity Statement) explains the changes in retained earnings. Retained earnings are on the balance sheet and are most influenced by dividends and income
An accounting period is a specific period of time covered by financial statements. An accounting period can be one month, one quarter, or one year, depending on the business.
Accounts payable AP
This account is used to describe all unpaid expenses. AP represents the money that your business owes for goods and services. A/P can be anything from your utility bill to the rent on your office. You typically receive a bill from the vendor for these goods and services
Accounts receivable AR
This is the opposite of accounts payable. AR is money owed to your business for good and services that have been provided but that have not yet been paid. It can be considered an asset.
Accrual accounting records transactions when they occur rather than when payment is made or received. Most regular businesses use the accrual accounting method.
This is the practice of spreading the cost of an expense across multiple accounting periods on your balance sheet. A common example is depreciation. Suppose you purchase manufacturing equipment for your business. You can spread the cost of that equipment over several years.
The things a company owns in order to run the business and it has a monetary value. This can include buildings, cash, land, equipment, tools, vehicles, furniture, and inventory. Assets can have varying degrees of liquidity, how easy it is to spend, like cash. Other assets are harder to spend, like property, which first must be sold or liquidated.
This is the process by which you ensure that your general ledger (GL) accounts are in balance with your ending bank balance for a specific month.
Capital is the money that your company can use for operations and investment. It is calculated by subtracting liabilities from assets. It can include cash, but it can include non-cash assets that can be leveraged or liquidated for spending. Capital is not the measure of how much the company is spending, but rather the amount the company could spend.
Cash accounting records payments when they are received and expenses when they are paid, not when they’re incurred. Most sole proprietors and very small businesses use cash accounting, but if you have employees, you must use the accrual accounting method.
This is the amount of cash the company is expected to receive over a select time frame. Monthly cash flow is how much cash you anticipate receiving in a month.
A certified public accountant is a designation conferred by The American Institute of Certified Public Accountants. CPAs pass a uniform certified accountant exam and are licensed in their home state. The designation denotes a certain level of mastery in accounting to verify that an individual is properly qualified to work in this field.
Cost of goods sold COGS
Cost of goods sold is the direct cost of producing or purchasing the items you have for sale. This can include anything from materials and labor to the cost of a product you purchase for resale. It is important to keep track of your COGS to properly calculate your gross and net profit.
Credit is an accounting entry that is made on the right side of any accounting transaction. A credit increases a company’s liabilities or equity account and decrease its assets.
A debit is the inverse of a credit. A debit paid to a business increases its assets. A debit paid by the business decreases its liabilities. The double-entry accounting method pairs every debit and credit in the ledger.
Depreciation measures how much value an asset loses over time. A classic example is the depreciation of a company vehicle. Each year, the vehicle decreases in value. The process of lowering an asset value is depreciation.
Diversification is the process of spreading investments into varied assets. The goal is to minimize risk by reducing the percentage of assets that can lose value resulting from a single event or transaction.
Expenses are what your company pays. Generally, they are categorized as fixed, variable, accrued, or operation.
Fixed expenses (FE) are payments that are the same each period, like rent or mortgage.
Variable expenses (VE) change regularly. Labor or inventory replenishment are common examples.
Accrued expenses (AE) are expenses that have yet to be paid.
Operation expenses (OE) are indirect costs, such as advertising or taxes.
On a balance sheet, equity is determined by subtracting liabilities from assets. Owner’s equity is a different concept that describes how much of something is owned by a person or business. Property equity demonstrates how much of a mortgage is paid, while stock equity describes the percentage of a company that is owned via stock.
This is the complete record of a company’s financial transaction over the lifetime of the organization, including assets, liabilities, revenue, expenses, and equity.
Gross profit margin
Calculated by dividing a company’s gross profit by its net sales during the same period.
This is the company’s profit excluding overhead expenses. It is often used as part of the calculation to evaluate a company’s value.
Insolvency is what occurs when a company or individual cannot pay its debts. Insolvency is often projected by comparing all expenses to revenue. If revenue is insufficient to cover expenses, insolvency becomes inevitable.
Inventory is the list of sellable goods owned by a company. Inventory is usually classified as finished goods (which are ready for sale), work-in progress goods (that require assembly) and raw materials (that will become other goods in time).
liabilities are debts or money the business owes. Accounts payable, bonds, loans, taxes, unpaid bills, and accrued expenses are different types of liabilities
A limited liability company (LLC) is a business structure in which the owners are not personally accountable for company debts or liabilities.
Net profit and loss
Net profit is how much money the business has made after subtracting every single expense. Net loss is how much money the company lost after this same calculation if profit is negative.
This is the general cost of doing business, but it does not include the cost of goods that are sold. Utility payments, printing costs and property taxes are examples of overhead.
Payroll is the total compensation a firm pays its employees for a given time. It includes keeping track of hours worked, distributing payments, and dividing money for Social Security and Medicare taxes are all part of the payroll process.
Also called an earnings surplus, retained earnings are a company’s net income left over for the company to spend after paying dividends to shareholders. The management of a business usually determines whether to keep the profits or distribute them to shareholders.
Return on investment is a calculation that demonstrates how much money is made from an investment relative to its cost. An ROI can be calculated for money spent on advertising and marketing. To determine ROI, the benefit of the investment is divided by the cost of the investment.
Revenue is the total amount of money earned by the business. It is used to calculate gross and net profit.
This type of bookkeeping system tracks a company’s financial activities by recording cash, taxable income and tax-deductible costs coming in and out of the firm as one entry per transaction. Single-entry bookkeeping can be performed through accounting software or simple tables. It is far less complicated than double-entry bookkeeping, which necessitates two entries for each transaction.
Variable costs are defined as a company’s costs pertaining to the number of goods or services it produces. Variable costs increase as output goes up and decrease as output declines. In contrast to variable cost, fixed cost refers to a company’s costs that remain constant regardless of production, such as rent and insurance.
Fundamental Accounting Principles
Economic entity assumption
A business is an entity unto itself and should be treated as such.
Monetary unit assumption
All financial transactions should be recorded in the same currency.
Specific time period assumption
Financial reports should show results over a distinct period of time.
The cost of an item doesn’t change in financial reporting.
Full disclosure principle
All information that relates to the function of a business’s financial statements must be disclosed in notes accompanying the statements.
Going concern principle
A business will continue to exist and function with no defined end date.
Businesses should use the accrual basis of accounting and report all financial information using this method.
Revenue recognition principle
Revenue is reported when it’s earned, regardless of when payment is received.
When an accountant finds a transactional error, they can use their professional judgment to determine if the error is immaterial to the business.
When there is more than one acceptable way to record a transaction, expenses and liabilities should be recorded as soon as possible, and revenues and gains should only be recorded when they occur.
The Bureau of Labor Statistics reports, “20% of small businesses fail in their first year, 30% of small business fail in their second year, and 50% of small businesses fail after five years in business. Finally, 70% of small business owners fail in their 10th year in business.” Small businesses are unsuccessful for a variety of reasons, but a major factor is inefficiencies in small business accounting. Whether your small business is just starting, or you are a seasoned veteran, proper management of business finances are a particularly important factor for the survival, success, growth, and longevity of your small business. We have complied a list of Small Business Accounting Tips to help you succeed.
Tips for Small Business Accounting
Know the five basic types of accounts, financial reports, and how to evaluate business performance.
Keep Personal and Business Finances Separate
To avoid future headaches, open a business account as soon as a business is established as a separate legal entity and an EIN (Employer Identification Number) is received. This personally protects you, the owner, from liability. Opening a business account also allows the company the option of a line of credit to cover cash gaps. Lastly, it helps in the long run when tax season rolls around.
Choose an Accounting Method
Small businesses can use two methods of accounting: cash or accrual based.
Accrual Method- Revenues and expenses are recognized when the transaction occurs, even if the cash is not in or out of the bank yet. It requires tracking receivables and payables which also means that double entry accounting must be used to record every transaction.
Cash Method- Revenues and expenses are recognized at the time they are actually paid or received. Think of it as in real-time.
Make Sure Your Records are Up to Date and Accurate
Nothing is worse than rushing around looking for documents right before the tax deadline. Keeping records up to date is also particularly important for a current and clear picture of the company’s financial state.
Businesses must remember the date to file yearly tax returns and the dates for estimated quarterly tax payments.
Quarterly tax payments consist of two taxes:
-Self-employment tax (Social Security and Medicare)
-Income tax (on profits)
Keep All of Your Receipts
Save all receipts for any business-related purchase. This is beneficial when filing taxes and claiming business expenses as tax deductions.
Examples of business expenses include but are not limited to: meals and entertainment, home office or rent, travel, vehicle related expenses, advertising, and office supplies.
These summarize a businesses financial health and help with future projections and business decisions.
Balance sheet: Summarizes assets, liabilities, and equity at a single period.
Profit and loss (P&L) statement / income statement: Breaks down business revenues, costs, and expenses over a period of time.
Cash flow statement: The statement of cash flow is similar to the P&L, but does not include any non-cash items such as depreciation.
Outsource Accounting Services & Integrate Technology with the Consultance Accounting
Many organizations benefit from outsourcing the bookkeeping and accounting functions. In today’s fast-paced world, you need a modern financial infrastructure to support your organization’s future. As experts in transforming small and medium-sized businesses using integrated accounting solutions, you can depend on us to identify the right scope of services to fit your needs. Consultance properly manage your accounting operations using our innovative technology platform so you can focus on your core mission and goals.
The professional accountants at Consultance Accounting go above and beyond so businesses in every industry succeed at every level. From start-up and business structuring to expansion and growth, Consultance guides clients every step of the way. The team is made up of highly experienced professionals, with expertise that includes accounting and bookkeeping, compliance and ethics, financial analysis, process and systems re-engineering, risk management, and accounting system optimization.
Consultance Accounting provides a broad offering of accounting services and tools to improve efficiencies and decision-making in a customizable format to meet each client’s specific needs. We are experts in the accounting field and are fully certified in the technology platforms we offer our clients. What makes Consultance different is how we deliver our services. Through our people, processes, and technologies, we have proven our unyielding commitment to exceptional client service and knowledge from industry experts.
2020 was an unusual year to say the least. Face masks became a fashion statement, toilet paper was a luxury, murder hornet invaded the US, Tiger King was inescapable, socially distanced live streams were available for everything from classes to concerts, and do any of us really know how to pronounce the name of Elon Musk’s baby? Regardless, if you are reading this, congratulations you survived 2020 and now it is tax season! Putting a cherry on top of an un-top-able year there are some changes this tax season. But do not worry, it is not all bad! We did some of the work outlining COVID tax deductions and other important information you need to know about the 2021 tax season.
Tax Deadline Date:
May 17, 2021
Increased to $12,400 for single filings and $24,800 for married joint filings.
PPE is Tax Deductible
The IRS announced that Personal Protective Equipment is treated as Medical Expenses. The protective equipment used to prevent the spread of COVID includes hand sanitizer, soap, disinfectants, gloves, sanitizing wipes, and masks purchased after January 1, 2020. PPE purchases can not be tax deductible if they are eligible to be reimbursed or paid under flex spending plans and medical savings accounts.
Employee Retention Credit
Small to medium sized businesses facing hardships because of the Coronavirus received incentives from the CARES Act to keep employees on payroll. This is a 50% credit on up to $10,000 of wages incurred or paid from March 13, 2020 to December 31, 2020.
Early Withdrawals from Retirement Accounts
The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March 2020 allows people to withdrawal up to $100,000 without having to pay the 10% penalty; this is called the “Hardship Withdrawal”. Be aware that you still have to pay taxes on the money taken out early and that may bump you up to a higher tax bracket.
Tax Deduction for Money Owed to You
Did you loan someone money in the last year because they were going through a tough time financially? If friends or family owe you money and you do not think they will repay, you get a tax deduction. Technically, this has been around for a while but this year it will probably be most helpful.
Freelance or self-employed workers can claim a tax deduction for a home office. This includes using part of your home or a business location outside of your home in addition to having a home office.
If you are not itemizing your tax return you can still take a charitable deduction. The CARES Act allows a deduction for charitable contributions of up to $300. However, this only applies for monetary donations not clothes or home items donated to Goodwill or other local charities.
Tax Breaks for Teachers
Like the above-mentioned deduction for Personal Protective Equipment, teachers can deduct supplies for COVID prevention in classrooms. These include sanitizing and disinfecting products, physical barriers, tape or chalk for social distance guides, air purifiers, masks, and gloves. Kiplinger explains, “The deduction is available for up to $250 of unreimbursed cost of COVID-19 protective items paid by an eligible educator after March 12, 2020. An “eligible educator” is anyone who is a kindergarten through 12th grade teacher, instructor, counselor, principal, or aide in a school for at least 900 hours during a school year. The maximum deduction jumps to $500 for a married couple filing a joint return if both spouses are eligible educators – but not more than $250 each.”
Medical expenses above 7.5% of your adjusted gross income (AGI = total income minus other deductions you have already taken) can be deducted this year.
As 2020 comes to an end, it is essential for business owners to close out the books in preparation for filing taxes and forecasting the health of the organization. Consultance Accounting has created an Accounting Year End Checklist to help you through this overwhelming process. Whether your company uses an Accounting Specialist, outsources accounting, or does most of the bookkeeping in house, thisAccounting End of Year Checklist for Businessescan help.
Year End Accounting Checklist for Businesses
Gather financial statements: Financial statements are extremely important because they give you a glimpse of where your business stands financially. They also show past and current finances forecasting the financial future. Easily accessible financial statements that you will need include: Income statement or Profit & Loss statement, Statement of Cash Flows, and Balance sheet.
Gather and organize your receipts: An easy way to do this is by using a software solution, which syncs with credit card or bank account and QuickBooks. Consultance Accounting is a technology-based accounting firm with the vision and expertise to deliver streamlined, user-friendly, and cost-effective accounting services.
Collect past due invoices: Try to collect all the money that customers owe to your business prior to year-end. Send out payment reminders, establish a payment plan, and document the payment process.
Check payroll: make sure all payroll records are accurate and up to date in the books.
Collect W-4s and W-9s: Verify you have Form W-4 for each employee you hired during the year so you can give them W-2s. Verify you have W9s for independent contractors or vendors who were paid more than $600 throughout the year so you can distribute 1099-MISC forms in January.
Reconcile bank accounts and credit cards: Do financial statements match up with bank and credit card accounts, and year-end statements? To make it easier, Consultance Accounting can provide you with the right accounting software technology platform to achieve your goals with maximum efficiency.
Take inventory: Get an accurate count of the materials and supplies on hand if business stores inventory. Complete an inventory check before year-end if business has physical inventory and match inventory totals to balance sheet.
Back up all information: The last thing you want is to lose all the important accounting data from the year. Make sure you have a reliable backup system.
Create a budget for the following year: Review statements from the current year to see a pattern in what needs to be budgeted and planned for in the next year.
Print and mail out tax forms: If the business has a fiscal year coinciding with the calendar year, forms must be printed and mailed by a certain time. If the fiscal year does not coincide with the calendar year, some of the same deadlines may apply, but double-check with your accountant to be sure.
Print out end-of-year statements: Keep electronic files and hard copies.
Give necessary data to accountant: Schedule a meeting and to review finances.
Consultance Accounting Services utilizes the most reliable technology platforms, proven processes, and extremely knowledgeable accounting professionals to assist small and medium sized businesses achieve their goals, improve productivity, and increase profitability.
Every business needs accounting software whether it is an association, a non-profit, a professional services provider, or sells retail products and services. What is Accounting Software? Accounting software automates an organization’s financial functions and transactions with modules including accounts payable, accounts receivable, payroll, billing, general ledger, and much more. It is difficult enough for business owners dealing with the daily operations of a business, streamlining workflows and standard operating procedures for efficiency, keeping employees and customers happy, organizing paperwork, creating financial reports which impact strategic decisions, in addition to accounting and bookkeeping. Eighty two percent of businesses are unsuccessful because of inadequate accounting practices and cash flow management.
Choosing the best accounting software is confusing. There are thousands of options on the market which offer custom options for specific business needs. Overwhelming, right? Eighty nine percent of small to mid-sized businesses insist they are more successful with an accountant or advisor and accounting software. Consultance Accounting is just what your business needs! Consultance Accounting is a technology-based accounting firm with the vision and expertise to deliver streamlined, user-friendly and cost-effective accounting services. We partner with best-in-class technology firms to create a customized platform that will tangibly reduce the amount of time and effort you must spend on your accounting activities while receiving the highest quality accounting services. The results will be streamlined document management, improved cash management, and real time metrics and analytics that provide you with greater insights into the financial health of your organization.
The Consultance team is comprised of highly trained and experienced experts in the field, who are fully certified in the technology platforms we offer our clients.
Take the hassle out of expense reporting! Using Expensify, Consultance Accounting can automate your organization’s entire receipt and expense management process and sync it with QuickBooks to give you real-time expense reporting. We can customize how expenses are coded to QuickBooks expense accounting, customers/jobs, classes, locations, items, and more!
Improve your time management and job costing! Do you need to track employees’ time? Do you have an automated process in place? Let us show you how well TSheets can integrate into a customized accounting solution for your business or organization. We can customize it to your organization’s specific needs and your industry’s requirements. We can also set-up Tsheets using mobile options such as text messaging and dial-in for standard feature phones or deploy native mobile apps for Android, iOS devices, and touch screen mobile apps for other smartphone options such as BlackBerry and Windows phones.
Visualize your financial data in ways that make sense! Fathom is a suite of in-depth analysis tools and metrics that we use to help you assess business performance, monitor trends, and identify opportunities for improvement. These tools and metrics help us assess profitability, cash flow, growth, and other key performance indicators (KPIs) that are meaningful to your business. We will create dynamic reports and dashboards so you’ll always be prepared to present to a client, report to a bank, or update your management team on your organization’s financial performance.
QuickBooks Online is at the heart of all our clients’ accounting solutions! More than 2.2 million small to medium-sized organizations use it successfully every day around the world. As a certified QuickBooks partner, you can be assured that we will transform accounting tasks that are currently complicated, time consuming and expensive and make them quick, easy, and cost-effective to manage. We will do the tedious, heavy lifting reliably and accurately when we set-up your account and every month afterwards. And we will probably do it for less than you are paying now.
Automate Payables and Receivables! Accurately tracking and processing purchases, sales, invoices, receipts, payments, and receivables require a lot of attention. This is especially true if your organization is paper based. By working with Consultance to adopt Bill.com, your organization can scrap the paper-based processes that are eating up time and adding to expenses for in-house bookkeepers to handle bill payments. On the receivables side, you will be able collect your money two to three times faster by moving payments online and giving your customers more payment options, including credit cards, PayPal, or direct debit from their bank.
Go paperless to cut cost, increase accuracy, and reduce time! The promise of a paperless accounting system is fulfilled with our implementation of QuickBooks and Hubdoc. Hubdoc automatically extracts key information from your receipts, invoices, and bills putting an end to data entry and filing of paper documents. Consultance Accounting will work on your behalf to set up your accounts with vendors, banks and lenders so that Hubdoc automatically pulls your accounting source documents into one secure hub. Every time a document is fetched or uploaded, Hubdoc extracts the key data and seamlessly creates entries in QuickBooks Online and Bill.com with the original documents attached.
Using LivePlan, we can help create your business plan! As part of our service offerings to our clients, we use LivePlan as a tool to help with business planning. In no time at all, you will be planning marketing activities, dreaming up products and service offerings, and creating essential financial projections. Live Plan works for any type of organization, at any stage in its development. It is the best way to grow your business and keep it financially healthy.
Consultance is committed to providing the most technologically advanced accounting software solutions available. Our commitment to continuous innovation improvements enables us to provide you with real time access to your financial information in the most useful formats possible and to improve the financial health of your business or organization. Contact Consultance Accounting to learn more.
A study conducted by Intuit, the creator of QuickBooks and other financial software, discovered 89% of small businesses say that they are more successful with an accountant or advisor. Why? What do accountants do? Accountants do a lot more than people think and they can assist a business at various stages of growth.
The U.S. Bureau of Labor Statistics (BLS) explains that accountants and auditors prepare and examine financial records. They ensure that financial records are accurate and that taxes are paid properly and on time. Accountants and auditors assess financial operations and work to help ensure that organizations run efficiently.
Examine financial statements to ensure that they are accurate and comply with laws and regulations
Ensure that taxes are paid properly and on time
Inspect account books and accounting systems for efficiency and use of accepted accounting procedures
Organize and maintain financial records
Assess financial operations and make best-practices recommendations to management
Suggest ways to reduce costs, enhance revenues, and improve profits
In addition to being responsible for the preparation and analysis of a company’s financial records, including data management, creation of financial statements and ensuring regulatory compliance in the company’s accounting practices, accountants must explain their findings. This includes preparing written reports, meeting with organization managers and individual clients, and deliver expert recommendations and solutions.
Accountants provide a wide variety of services including administrative tasks that are distracting business owner’s and inhibiting growth. They also provide strategic advice and come up with clever ways to reduce expenses and increase revenue. Hiring an accountant allows owners to run their business with more clarity and confidence
The Consultance Accounting Difference
The professional accountants at Consultance Accounting go above and beyond so businesses in every industry, including non-profits, succeed at every level. From start up and business structuring to expansion and growth, Consultance guides clients every step of the way. The team is made up of highly experienced professionals, with expertise that includes accounting and bookkeeping, compliance and ethics, financial analysis, process and systems re-engineering, risk management, and accounting system optimization.
Consultance Accounting provides a broad offering of accounting services and tools to improve efficiencies and decision-making in a customizable format to meet each client’s specific needs. We are experts in our fields and are fully certified in the technology platforms we offer our clients. What makes Consultance different is how we deliver our services. Through our people, processes, and technologies, we have proven our unyielding commitment to exceptional client service and knowledge from industry experts.
Many tax changes, including the tax day deadline, are occurring in light of the COVID-19 pandemic. These changes are affecting individuals, small business, and tax-exempt entities alike. This article provides a general overview of the federal tax relief measures and changes recently implemented.
Tax Deadline Day
The Treasury Department and Internal Revenue Service announced that the federal income tax deadline for filing has been extended from April 15, 2020, to July 15, 2020. Federal income tax payments are also deferred to July 15, 2020, without interest or penalties, regardless of the amount owed. The postponement applies to all taxpayers, including individuals, estates, trusts, corporations and other non-corporate tax filers as well as those who pay self-employment tax.
Tax Credits and Relief
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted on March 27, 2020, is designed to encourage eligible employers to keep employees on their payroll, despite experiencing economic hardship related to COVID-19, with an employee retention tax credit.
The Employee Retention Credit is a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees after March 12, 2020, and before January 1, 2021.
The Families First Coronavirus Response Act (FFCRA) contains two separate provisions: The Emergency Paid Sick Leave Act (EPSLA) and The Emergency Family and Medical Leave Expansion Act (Expanded FMLA). It provides small and midsize businesses a refundable tax credits that reimburses them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19.
Small-Employer FICA Tax Relief relates to sick leave and family medical leave payments authorized by the Act are exempt from the 6.2% Social Security tax component of the employer’s federal payroll tax that normally applies to wages. Employers must pay the 1.45% Medicare tax component of the federal payroll tax, but they can claim a credit for that amount.
Other Tax Updates
The Standard Deduction amounts will be increased slightly this year compared to previous years.
Single & Married Filing Separate $12,200
Head of Household $18,350
Married Filing Joint $24,400
The Insurance Penalty for not having health insurance no longer applies for 2019 federal tax returns. However, some states have their own individual health insurance mandate.
The Alimony Deduction was eliminated for divorce rulings signed after December 31, 2018 that require alimony payments. The payer will not be allowed a deduction for payments made, nor will the payee be required to claim the alimony as income on their respective tax returns.
Do your financial statements and accounting records give you what you need to optimize tax savings? Have you considered working with a reputable and experienced accounting firm?
If you need help with bookkeeping services or accounting services, or have questions understanding the new tax changes, please reach out to Consultance Accounting and we will be happy to assist.
Disclaimer: Consultance Accounting does not provide tax or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax or legal advice.
It’s essential for any business to have basic accounting principles in mind to ensure the most accurate financial position. Your clients and stakeholders maintain trust within your company so recording reliable and certified information is key. What are the 5 basic principles of accounting? To better understand the principles, let’s take a look at what they are.
1. Revenue Recognition Principle
When you are recording information about your business, you need to consider the revenue recognition principle. This is the period of time where revenues are recognized through the income statement of your company. In order for your revenues to be recognized in the period that the services were provided if you are on the accrual basis, If you are on the cash basis then, the revenues need to be recognized in the period the cash was received.
2. Cost Principle
Recording your assets when you purchase a product or service helps keep your business’s expenses orderly. It’s important to record the acquisition price of anything you spend money on and properly record depreciation for those assets.
3. Matching Principle
Expenses should be matched to the revenues recognized in the same accounting period and be recorded in the period the expense was incurred. If there is a period of time where revenue was recognized on sold products or services, then the cost of those things should also be recognized..
4. Full Disclosure Principle
The information on financial statements should be complete so that nothing is misleading. With this intention, important partners or clients will be aware of relevant information concerning your company.
5. Objectivity Principle
The accounting data should consistently stay accurate and be free of personal opinions. Make sure the data is also supported by evidence that can include vouchers, receipts, and invoices. Having an objective viewpoint, in this case, helps rely on financial results. For example, your viewpoint may not be objective if you once worked for the same company that you are now an auditor for because your relationship with this client might skew your work.
Now that you’ve got all of these down, moving forward with the financial positioning of your business will be effortless.
Contact us at 877-232-6788 if you have any questions or concerns about implementing these basic accounting principles to your business.