Basic Accounting Principles

Which accounting method is best for your business?

Most businesses typically use one of two basic accounting methods in their bookkeeping systems: cash basis and accrual basis. While most businesses use the accrual basis, the most appropriate method for your company depends on your sales volume, whether or not you sell on credit, and your business structure. The cash method is the most simple in that the books are kept based on the actual flow of cash in and out of the business. Income is recorded when it is received, and expenses are reported when they are actually paid. The cash method is used by many sole proprietors and businesses with no inventory.

From a tax standpoint, it is sometimes advantageous for a new business to use the cash method of accounting. That way, recording income can be put off until the next tax year, while expenses are counted right away.

With the accrual method, income and expenses are recorded as they occur, regardless of whether or not cash has actually changed hands. An excellent example is a sale on credit. The sale is entered into the books when the invoice is generated rather than when the cash is collected. Likewise, an expense occurs when materials are ordered or when a workday has been logged in by an employee, not when the check is actually written. The downside of this method is that you pay income taxes on revenue before you've actually received it.

Should you use the cash or accrual method? The accrual method is required if your annual sales exceed $5 million and your venture is structured as a corporation. In addition, businesses with inventory must also use this method. It also is highly recommended for any business that sells on credit, as it more accurately matches income and expenses during a given time period. The cash method may be appropriate for a small, cash-based business or a small service company. You should consult your accountant when deciding on an accounting method.

Source : http://www.entrepreneur.com/

Accounting change not meant to shock: SEC's Cox

WASHINGTON (Reuters) - An accounting change that could force banks to bring trillions of dollars of off-balance sheet transactions back on their books will be implemented in a way that will not create unnecessary shocks, the chairman of the U.S. Securities and Exchange Commission said on Thursday.

"We want to make sure that the discussion of this and the implementation of this is done in such a fashion that the market can absorb it and it does not create any unnecessary shocks," SEC Chairman Christopher Cox told a Congressional panel.

Accounting rule-maker the Financial Accounting Standards Board is working on a proposal to eliminate certain off-balance sheet entities called qualified special purpose entities (QSPEs) that are used to pool debt such as car loans and mortgages.

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How can i learn bookkeeping ? - Some Basic Tips

Good bookkeeping practices are essential to keeping your business running smoothly.

Regardless of the size of your company, good bookkeeping practices are essential to keeping your business running smoothly. Accurately kept books do more than make it easy to file your annual tax returns. Banks may require you to submit a profit and loss statement or balance sheet so they can determine your credit-worthiness. A quick review of your books can show where you need to spend more or less money; who gives you the most business and who takes the longest to pay you; how much you're paying out in commissions compared to how much you're selling.

Here are some general terms that are helpful to know.

ASSETS are things that you own or are owed to you: bank accounts, inventory, loans made to other companies or individuals, company cars, etc.

LIABILITIES are things that you owe: loans, accounts payable, payroll taxes, etc.

EQUITY is net income (sales less expenses), capital stock, and owners/officers distributions.

EXPENSES are things you pay for: business meals, gas for company cars, professional services, postage, etc.

REVENUE is money you earn from the sale of services or product, or from interest earned on a bank account, investment, or a lease or loan of your equipment or property.

COST OF SALES is any expense directly related to earning revenue: product purchases, freight or delivery, sales tax expense, etc.

One of the most valuable resources you can have for a small business is a public accountant. Even if you only take your books in at tax time, having someone to give you specific advice and answer your bookkeeping questions is important. Find an accountant whom you like and trust. If you're having difficulty finding one on your own, talk to other people with similar businesses for recommendations.

Here are some helpful hints that should make good bookkeeping an easy task.

1. Get organized! Good organization is essential to good bookkeeping. In fact, when you come right down to it, bookkeeping is organizing. There are only four general categories of records you need to keep: bills (accounts payable or A/P), customer invoices (accounts receivable or A/R), payroll (time sheets and pay records), and human resources (employee information not directly related to payroll). File all records for these categories neatly in a system that works for you. Done well and consistently, even shoe boxes work! Even better are expandable, alphabetic file folders. Keep one folder for A/P and one for A/R. If your business is too large for that, invest in file cabinets - anything from small portable cases to floor-to-ceiling lateral files. Get something that fits your volume and your budget. Use a different color file folder for each category of record, and it will be that much easier to keep things organized.
   
   
2. Get an accounting software program, if you can fit it in your budget. This is one place where having an accountant can be very helpful. Ask your accountant to help you select the best program for your needs. An accounting program will collate information you input and present it in helpful reports almost instantly, so you don't have to hunt through your check register or deposit log for the information. Some of these reports can help you pinpoint problem areas, like deadbeat customers or inventory that's not moving, or will help to show employee shrinkage or overtime policy abuse. With a good program, you can get customized reports that will tell you almost anything you want to know. If software is out of the question, you can keep track of everything in a computer spreadsheet or good old traditional ledger books. Even if you have monthly services from your accountant, it's a good idea to keep track of everything on your own. That way, if you need some information in the middle of the month, you'll have it at your fingertips, instead of having to spend a lot of time searching. Keep one spreadsheet/ledger for A/P and one for A/R. If you pay all of your bills every month, your ledger for A/P can simply be your check register, as long as you . . .
   
   
3. keep detailed records of all payments and deposits. As soon as you write a check, write down when it was written, to whom, for what, and how much it was for. Most accounting programs have a check writing feature, and all of this information will automatically be recorded. If you don't have software that will do this, invest in a business desk set checkbook. The checks have large stubs on which you can write down all of the important information. Record as much detail as possible for your deposits, including if they were cash or credit card, and what kind of credit card.
   
   
4. Keep your check register reconciled to your latest bank statement. If a check or deposit doesn't clear the bank within a couple of months, contact the bank or the payee to find out why. If necessary, stop payment, void and re-issue uncleared checks.
   
   
5. Schedule a day of the week for paying bills and for reviewing unpaid customer invoices. Paying bills on time saves you money by avoiding late charges, and some vendors may give you a discount if you pay by a certain time. Don't let your customers lag too far behind in paying their bills. Send out monthly reminders, and set up a policy for when you will send a bill to a collection agency.
   
   
6. If you are a retail seller subject to sales tax, keep detailed records of sales so that you don't collect or pay sales tax on non-taxable items. In many states, labor and freight are non-taxable. If you sell to a tax-exempt entity, make sure that you get a copy of their exemption certificate. Keep those in a separate file, preferably with a list showing each customer's name and exemption number.
   
   
7. Make sure you are in compliance with record-keeping standards. There are some things that you only need to keep for three years, like individual copies of time sheets. Others need to be kept for much longer. For example, all records pertaining to a worker's compensation claim need to be kept forever. Regulations and recommendations change periodically, so (everyone together now) ask your accountant.
   
   
8. There are several companies out there that give continuing education seminars on a range of business topics, from human resource management, to communication skills, to effective accounts payable practice . . . just about anything you can imagine. Go to some seminars. Think about what you want to learn ahead of time, and ask questions that are relevant to your business. Oddly enough, meeting other people who also have lots of questions can be a real confidence builder. You'll know you aren't alone.
   
   
9. Take advantage of the many resources that are available. On-line forums exist for almost any topic. The business section of your local bookstore should have plenty of books for small businesses, or you can check materials out from the library. The Internal Revenue Service has a variety of publications for the small business owner, free of charge, available on their website. Also, the United States Small Business Administration can point you to a wealth of information. There is probably a national association for your type of business. The annual dues may seem high, but the industry specific information that you can get from them may well be worth it. This list could go on and on, but it would still end with this: when in doubt (one more time!), ask your accountant.
   

As you get more accustomed to keeping your books organized and accurate, you'll be better able to determine what information is really important, e.g. what receipts to keep, and how much detail to enter in your ledgers. You'll save time and money because you'll be getting your bills paid on time, and you'll be able to collect more money from your clients because you'll know how much they owe you, all without having to dig through all of the paperwork on your desk.

Source : http://www.essortment.com/

Bookkeeping Tips

Bookkeeping is a major challenge for many small businesses. We are good at our core business, but may not know much about the bookkeeping side, or don't enjoy keeping the books, or don't have time to keep the books.

Whether you are keeping your business' books yourself, or are hiring a bookkeeper to take care of them, here are some tips to help tame your paper monster, and save you some money, too.

1. Every week, take 15 minutes to file your receipts. This can be a simple as stuffing them all into one file, or sorting them by category. Do what works best for you, but do it. Having all your receipts in one place means that you won't lose them. A little bit of effort over the year will ensure that tax time is not a stressful time and you get all your deductions.
   
   
2. If your home phone is also your business phone, take the time each month to go through your phone bill with a highlighter and highlight all of your long distance business calls. You get to write off a portion of your basic phone charges if you work from home, but this is a small amount, even over the course of a year. Your long distance charges must be separated out. Highlight them and make an abbreviated note about who the call is to, if it is not obvious. Many small businesses lose this as a business write off because at the end of the year they can't remember which calls were for business, and your bookkeeper won't write off any of them, because there is no way for her to tell which calls were for business.
   
   
3. Take the time to staple receipts and bills that are more than one page long together. This will save you and your bookkeeper time at the end of the year.
   
   
4. Keep a file pouch in your vehicle or in your briefcase for receipts. Throw your receipts in the pouch as you get them. Don't stuff them into your pockets, purse, console, briefcase, or glove compartment. When it comes time to do your books, finding your receipts should not be a treasure hunt.

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The Future of Accounting and Finance: New Skills for a New World

Founded in 1948, Robert Half International is the world's leader in specialized consulting and staffing services. The company's financial staffing divisions include Robert Half® Finance & Accounting, Accountemps® and Robert Half® Management Resources, for full-time, temporary and senior-level project professionals, respectively.

The growth of international business has resulted in numerous changes and challenges for accounting and finance professionals. The increasingly global nature of business is accelerating the convergence of professional practices and norms, such as principles-based accounting and International Financial Reporting Standards (IFRS). In addition, workforces are becoming more diverse, making communication more complex.

Changes such as these have driven up the demand for individuals with well-rounded skill sets, including excellent communication and analytical abilities, as well as a global understanding of a firm's corporate culture, values and ethical standards when interacting with colleagues and clients around the world.

Possessing a global perspective will help position you for a wider variety of future career opportunities. Following are ways in which accounting and finance professionals can enhance their skill sets and improve their marketability in today's international business environment:

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20 tax tips from the experts

The 2008-09 tax season is almost upon us and entrepreneurs can expect to get some extra scrutiny this year. SmartCompany has asked a panel of tax experts for their best tips and the best action you can take now to minimise your tax bill

The Federal Government has given the taxman an extra $257 million over the next four years to increase its scrutiny of businesses – it expects to collect an extra $1.98 billion for its efforts.

All this means you need to have your tax affairs in good order if you want to avoid angering the taxman, and claim as many deductions as possible. To help you, SmartCompany has spoken a panel of tax experts to get their top tips from a business and personal tax point of view.

Every dollar you can save is another dollar to reinvest in your business, or pay for that well-deserved holiday.

Before we start, there are two very important bits of advice that every successful entrepreneur should follow.

PricewaterhouseCoopers partner Paul Brassil says his best tip for entrepreneurs is to spend more time finding the right tax adviser. “Find someone you really like working with, and who has strong technical backup in people and resources. Too often people muddle along with an adviser from the distant past, without recognising that the needs of a growing business include upgrading the level of advice they receive.”

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Announcing: The “Best of the Best” Business Opportunity!

What is the “Best of the Best”? You might be surprised to learn that of all the possible business opportunities available today, a Bookkeeping and Accounting practice is considered by some to be one of the best. In fact, Paul and Sarah Edwards, authors of “The Best Home Businesses for the 21st Century,” rate a bookkeeping service as the “Best of the Best” home-based businesses. Below is a list of things that I think make an accounting and tax service such a great opportunity.

1. It’s Mandated By Government — Every business needs some form of bookkeeping — whether it’s a one-person operation or the business has thousands of employees.
2. A Great Income — A person can expect to earn more than $30 per hour — sometimes as high as $75 per hour. The average client billing will be $300 per month and require six to eight hours a month to complete.
3. Inexpensive to start— For less than $1,000 a person can purchase everything they will need to get the business underway. Those that already have a computer have the biggest part of the investment taken care of.
4. No Special Equipment Needed — Other than a computer, printer, inexpensive calculator, and fax machine, there’s no special equipment that’s necessary.
5. Work Anywhere — Using today’s technology you can have clients anywhere in the world.
6. It’s Easy — Accounting/Bookkeeping software has become easier to use. The most popular software on the market today is QuickBooks Pro (less than $250).
7. No Outside Office Required — You need only a small area of your home for your office. It can even be in the corner of a bedroom.
8. No Zoning Hassles — There’s no traffic in and out of your home, so zoning laws are never a consideration.
9. Keep Your Present Job — You can build a part-time business while working full-time at another job.
10. Work When You Want — You can perform the work during the day or night. It’s a great business to work around a busy schedule.
11. No Inventory — You don’t have to purchase or maintain inventory.
    

Maybe you feel like you’ve gone as far as you can go in your current career. Perhaps you’re a homemaker who wants to build a business out of her home. For thousands, an Accounting and Tax service could be the perfect business for you. How can I say this? There are thousands of people just like you who have found personal and professional satisfaction by owning a bookkeeping and accounting practice.

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China urges financial institutions to extend service in rural areas

China's banking regulators have urged financial institutions to speed up innovations and mechanism reform in rural areas to make credit more accessible to farmers.

The country had made progress at extending financial services in rural areas, including the establishment of new types of financial institutions and development of micro loans, chairman of China Banking Regulatory Commission (CBRC) Liu Mingkang said.

The country had 50 new-type rural financial institutions so far, including county- and village-level financial organs, credit companies and capital mutual aid organizations.

Credit from these new type of rural financial institutions mainly went to farm households and small-sized enterprises in rural areas.

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'File your tax returns in time or face action'

NEW DELHI: Brace up for a call from the Income Tax (I-T) department if you are not filing your returns every year. This time, taxmen have an express instruction from the government to drag you to courts, if the need so arises, to ensure compliance.

With Finance Minister P Chidambaram hopeful of collecting an ambitious Rs 4 lakh crore in direct taxes in the current financial year, the authorities have been instructed to take up as many surveys as possible besides conducting raids on suspect big evaders to meet the target. Soon after inaugurating the two-day conference of chief commissioners and directors-general of Income Tax on June 9, Chidambaram had said that the department had already taken up 15 cases of 'non-filer' (those who have never filed a return) and 'stop-filer' (those who have stopped filing returns) for prosecution.

Hinting at stern action against wilful evaders, the FM had announced that a general direction had been given to taxmen that if during a survey or a search a person is found that he had never filed a return (non-filer) or has stopped filing return (stop-filer) in the last three years, steps must be taken for his prosecution. According to existing provisions of the I-T Act, failure to file returns may land a person in prison for a term extending up to seven years in case he is found to have evaded tax of more than Rs 1 lakh, or a penalty of Rs 5,000 for those on whom tax dues are found but returns are not filed.

Though the law on filing mandatory returns has been in existence for a long time, the very reiteration of the fact indicates the government's intention to invoke its provisions to catch wilful evaders.

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A new era in accounting?

In the battle to set accounting standards for companies across the globe, the United States appears to have lost. More than 100 countries, including Russia, those in the European Union, and soon Canada, have adopted or agreed to adopt the rules set by the London-based International Accounting Standards Board, a group established just seven years ago.

In doing so, they have rejected generally accepted accounting principles, the standard this country has been using for decades. And now that the world has shown a preference for international financial reporting standards, or IFRS, the big question is if, or maybe when, the United States will do the same.

Accountants who read the Securities and Exchange Commission's actions like tea leaves believe the agency will either allow or require public companies to switch as soon as 2011. Doing so would represent a seismic shift in the otherwise staid world of accounting.

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Why Accounting is Critical to the Success of Every Business

There are three primary reasons accounting is critical to the success of every business:

• Tax Planning
• Cash Flow Management
• Management Information
  

Lets go through each of them in the order above.

Tax Planning
How would you like to be the coach of a basketball team, but were not allowed to see the score, nor the statistics until the end of the game? Does it surprise you that many small business owners run their businesses this way?

Many small business owners just collect all their financial information in a box during the year. After the year is over, they will drop these on a tax preparer's desk, and hope the tax person can figure the assortment of papers out. The tax preparer then does his/her best to sort through the materials, and arrive at the information the IRS is looking for. Then a phone call to the wearied business owner will notify him/her of the damages.

It doesn't take much imagination to realize that this is no way to manage a business. With information available throughout the year, a business can take advantage of tax deductions and tax planning concepts that will reduce taxes for the owner. It's not unusual to save the business more on taxes than you charge them in fees for a year.

Cash Flow
Every business owner knows that cash is the "life blood" of the business. Without it, the business suffers and in many cases is forced to close. On the other hand, with proper cash flow management, a business owner can make the best use of his/her cash and anticipate cash needs in time to arrange for financing, if necessary.

Furthermore, knowing the bank balance is not enough. A business can have a sizable bank balance, but be in terrible shape. Our role is to go beyond the bank balance and see further cash needs and resources.

Not only will you be able to provide the business owner with accurate lists of cash resources (current assets) but you will also assist them in collecting accounts receivable, reducing their tax burden, and acquiring financing through preparing all the necessary documentation for the bank, investor, or finance company. The fact that you are helping them with their accounting will improve the chances of them getting a loan as banks deeply recognize the value of good financial record keeping.

Management Controls
Would you ever drive your car blind-folded? Of course not, that would be not only foolish but probably have tragic consequences. Yet, so many businesses have the blindfold on when they operate their business. They have no idea where they've been, where they're at, or where they plan to go. Is there any wonder why one-third of all businesses close in the first 6 months of existence?

This is where you should use a presentation book. A presentation book is a sample of complete books of accounting for various types of businesses. You can create one, or Universal has such a book you can buy. Show the business owner what type of information you will be able to provide that will help him/her in running their business.

Review each journal. Identify the value of knowing how much sales a business had each month and where the money was spent. Emphasize that payroll will no longer be the fearful subject it now is as you take over the burden of maintaining it. If they already have a payroll service processing their payroll, congratulate them and offer to help them understand payroll even better.

Show them an income statement and balance sheet. The income statement provides the monthly "score" for the business. By comparing the current month to prior months a business can not only determine if they are improving or not, but also why profits were up or down.

The balance sheet provides information on financial resources and obligations. This will help to determine the strength and solvency of the business. By tracking key indicators, such as current ratio, you and the business owner can identify potential problems before they become insurmountable.

In each of these benefits, you want to emphasize that information is power. The more information you can provide to the business owner the more capable they will be at running their business effectively.

As you're finishing, ask the prospective client if these benefits are appealing. If he/she says "Yes," then you will want to negotiate a fee that will be fair for them and fair for you at the same time. If not, this would be a good time to thank them for their time, leave your card, and move on.

Source : http://www.accounting-and-bookkeeping-tips.com/

Understanding Accounting Vocabulary

When you learn something new like accounting concepts and terms, it helps to create links between what you know and what you are trying to learn. In some ways, it is like learning a second language and decoding the new word is part of the learning process. For example, trying to translate the Spanish word necesario you might brainstorm with necessary - and you would be right. How about blanco? Blanco is like blank which is like white. So, blanco is Spanish for the color white.

Try to make some logical connections about the accounting vocabulary. Take the word - accounting - and think about it. Really, the accounting system is a basic counting of what goes on in your business.

Let's move on to transactions. Transactions are the business activities, or actions, that build day by day and become your expenses and income. Try to think about the term - transactions. Actions are business activities, and trans means across or thru. These are the basic building blocks of an accounting system. Transactions are to accounting like what raw materials are to a factory, or gasoline is to your engine - the transactions are real and how your accounting system handles them impacts your business.

You must keep a record of your transactions to know how much money your business earned and how much money your business spent. Sounds obvious, right? Ask your bookkeeper or accountant how obvious some transactions are. It can get tricky quickly if you are not clear about what happened in the transaction and how you want it recorded.

For example, if you were a carpenter you might pay cash for a bucket of nails to assemble hand made wooden deck chairs. The nail purchase is a transaction and will have to be counted as a business expense. In your workshop, you then assemble the chair using a pneumatic nail gun, sand paper, stain and varnish. The next day you deliver the chair to a customer in a neighboring town. You hand the customer a sales slip and they then write you a check. That, too, is a transaction. It is easy to see the transactions when money is spent or received. Did you, however, see the other transactions?

The stain and varnish, nail gun use and chair parts were also part of the transaction. What about the gasoline and truck used to deliver the chair? Did you have any left over nails or did you use them all? Maybe there is a little life left in the sand paper but it is not new anymore, is it? If we do not account for those costs we are missing a piece of the picture-an important piece-that could affect how much money you have at the end of the year.

In all your business activities, try to think in terms of transactions because once you can identify what transactions occur in your business, you will be able to organize them into a meaningful manner. Right now, take a minute to list what transactions occur in your business each day, week and year. Always thinking in terms of transactions might seem miserly, but it is important to be cost-conscious and honest with yourself about all your transactions. Your success in business depends upon it.

Some transactions are initiated by customers and suppliers. Other transactions can take place inside your business or back office. The bookkeeping department creates transactions when they adjust your books for year-end considerations like machinery depreciation or inventory shrinkage.

What is depreciation? Let's say you bought a brand new car, a 2006 Professor Now Coupe, and you spend $27,500 on this new car. Next year the car has some dings on the doors, wear on the tires, stains on the seats and 20,000 miles on the engine. You know your car is not worth $27,500 anymore. This means your car has lost value or depreciated.

When it comes to business owned equipment, you can deduct this lost value as a business expense. Sure, you did not spend cash on the lost value but with depreciation, this is a transaction your bookkeeper or accountant will force through at the end of the year. On your taxes, it helps you by increasing your expenses like all other cash transactions. Of course, the other side of depreciation means your equipment is not worth as much anymore.

In order for you to get a really clear picture of how your business is operating, you need to be diligent and thoughtful about what your real expenses are. Depreciation is a real expense even though it is not a cash transaction.

Learning to see transactions for what they are takes practice and contemplation. Transactions affect so many areas of your business that you must analyze the daily details so you can piece together the big picture.

Source : http://www.articles2k.com

ProfessorNow.com offers free educational courses in an easy to follow format in various subjects. To view a free online course covering the subject of this article, please visit ProfessorNow.com.

New Mexico governor proposes rebate, tax holiday

SANTA FE, N.M. - Gov. Bill Richardson is proposing a tax rebate to help New Mexicans with rising household expenses along with a 10-day tax holiday in late November and early December.

The proposals are part of an economic relief package for New Mexicans that the governor will ask lawmakers to approve during a special legislative session, which he plans to call in September.

The governor is to outline his proposals at a news conference Thursday. He previewed some provisions in Las Cruces on Tuesday.

Richardson proposes temporarily suspending the gross receipts tax on certain purchases from Nov. 28 through Dec. 7. The day after Thanksgiving traditionally kicks off the holiday shopping season.

Gilbert Gallegos, a spokesman for the governor, said Wednesday the tax break would help families getting ready for the Christmas holiday and cover certain items, including clothing and some electronics like laptop computers. The proposal is expected to cost about $1.9 million in the current budget year.

Since 2005, New Mexico has offered a three-day tax holiday on purchases of some clothing, school supplies and computers. It will be Aug. 1-3 this year.

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Cost Benefit Analysis-Whether you should outsource your Bookkeeping to Professional Book Keeper.

What is a role of a bookkeeper in your organisation : BOOKKEEPERS keep complete, up-to-date, and accurate records of accounts and financial arrangements. Bookkeepers verify and enter information into journals and ledgers or into a computer. They periodically balance the books and compile reports and financial statements. Bookkeepers also receive, record, bank and pay out cash. They balance checkbooks with monthly bank statements. They may calculate employee wages from plant records or time cards and issue payroll checks.

Some of the other work they may do includes posting accounts receivable and payable, prepare and make bank deposits, record payrolls, maintain inventory records, purchase supplies, prepare purchase orders and do expense reports. Bookkeepers may also make schedules, sort documents, and file bills. These type of jobs are found in every industry and may have various job titles, such as accounts payable clerk, accounts receivable clerk or assistant bookkeeper. Cost of a Bookkeeper : The pay for these jobs depends upon experience, clerical skills, the level of responsibility and the job location. Beginning salaries go from minimum wage to $ 15 per hour. Experienced Bookkeeper can make $ 20 an hour. After having worked for three years with the same firm, a Bookkeeper can earn at $ 25 per hour.

A Bookkeepers usually work 40 hours a week; sometimes it may be necessary to work overtime. Some employers have fringe benefits such as paid vacations and sick leave, life and health insurance, and bonuses. Other benefits that the employer may include are participation in a credit union, or retirement and profit sharing plans. Advantage of outsourcing Bookkeeping work to a professional bookkeeper : There are several distinct advantages to outsourcing your bookkeeping functions. First and foremost is saving money. You get what you pay for and if you don't pay for quality than you won't have quality service. However, you can save money by outsourcing because you won't be paying for employer payroll tax expense, workman's compensation and general liability insurances, vacation time, sick time, health insurance and other benefits a good full time bookkeeper will expect from his/her employer. Just remember, however, that these costs will be built into the consultant's hourly rate and their fee will reflect these costs. Any bookkeeping consultant who has not taken these costs into consideration is not a bookkeeper you want - if they don't know enough to include these costs into their fees, then they don't know enough to be a help to your business. You should expect to pay at least three times what you would pay an experienced full charge bookkeeper.

And just how do you save money by paying three times the amount you would pay an employee? Well, let's see. There will be no recruiting, interviewing and training costs for start. And if you should find yourself unhappy with the services there will be no additional recruiting, interviewing and training to replace your bookkeeper. Also, you will not have to be concerned about law suits such as sexual harassment, unlawful firing, age discrimination, sexist, etc. Or an increase in your unemployment rates because you laid off an employee that you really wanted to fire but had no lawful cause to do so. So right away we have less time and money spent and potentially less hassle if things don't go well. And of course you will not be paying workman's compensation and general liability insurance premiums. Also any worthy bookkeeper will expect at least two weeks vacation, coverage for sick time, health and dental insurance and even perhaps more benefits. Most professional bookkeepers will have their own offices saving you space within your office. So you will not be buying that extra desk, calculator, computer and computer software. Your bookkeeper will be providing all of that as part of his/her fee. No software updates, computer maintenance, training costs, etc. Of course should you prefer to have your computerized bookkeeping records available to you at your office, a small investment in software installed on your computer makes this possible. Also no office supplies to be paid for. You will be amazed at just how much pens, pencils, and paper can be used by a bookkeeper.

Your consultant bookkeeper will either ask you to drop off the work at their office, will pick it up at your office or some may even offer remote bookkeeping service. And by having your bookkeeping done off site, your bookkeeper will be able to work more efficiently and accurately because her/his office will most likely offer less distractions than your busy office. All of this is saving you money. And the best reason for outsourcing is that you control the amount of money spent on bookkeeping. What I mean by this is that the person you hire to do your bookkeeping will be doing just that - not answering the phone, dealing with drop-bys, chatting to other employees, etc. Also you can start with just a few hours a month and add on when you need to and then adjust downward again should it be necessary.

Can you imagine finding an employee to start with only four hours a month, then asking them to put in 20 hours a week for awhile and then back down to four hours a month again. I don't think you would keep them for very long, but a free lance bookkeeper is able to work around these variables and even more importantly expects to work with flexible schedules. So have I convinced you yet? If so, then just remember "you will get what you pay for". Go for top quality because your financial records are the core of your business and without great bookkeeping you cannot expect to succeed no matter what type of business you have. After all don't you think you are worth it ?

About Autor :

Mr.Bhaskar Thakkar is a qualified Chartered Accountant and professional bookkeeper from India. He is a president of M/s. BT Associates, Chartered Accountants. The said firm provides Book keeping, Accounting, Auditing and Tax preparation services to various Chartered Accountants in UK, US and Canada. The firm is also specialized in preparation of VAT returns, Payroll Processing. Visit 1. btassociate.com,. A division of said firm provides various outsourcing solutions please visit 1. jobs2india.com., to get more details.

Source : http://mesotheliomakiller.com/

Tax Advantages of a Home-Based Business

What Kind Of Tax Advantages Do Home-Based Businesses Enjoy?
You have probably thought of many of the benefits of running your own successful accounting and bookkeeping service. From the independence of working for yourself to making better income than you may currently make, there are many reasons that starting a home-based business might be right for you. One consideration that you might not have taken into account is the tax advantages that you will enjoy with a business run out of your home. Let's explore these qualifying deductions, starting with the better-known ones.

The Home Office Deduction
The deduction that likely comes first to mind that home-based businesses can take advantage of is the "Home Office Deduction". The Home Office Deduction allows you to deduct some or all of the expenses of your office at home and related expenses.

To qualify for this deduction, your home office must be the principal place where your business is done. Secondly, the office space must be used exclusively for business use to qualify. For example, if you use your kitchen as your primary workspace, it is likely that you cannot take the home office deduction, assuming that you use it for personal use as well. To be on the safe side, set aside a room as your home office where possible. This will keep you on the safe side should the home office use ever come into question.

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Expert: SaaS Will Alter Future Landscape of Accounting Software

The meteoric rise of Software as a Service, or on-demand hosted software, has prompted a paradigm shift that poses challenges not just to a firm's traditional IT infrastructure but also to vendors who must now counter the trend with low-cost, high-performance solutions to retain their user bases.

"In the next few years most accounting software will migrate into this space," predicted Michael Bodnar of Quantum Information Technologies. "Customers are literally one click away from leaving [their current software package], so it's up to the vendors to improve their functions and performance."

Bodnar, who led a session at the AICPA Information Technology Conference here on the market dynamics of SaaS, pointed to the rapid proliferation of SaaS CRM and business software providers such as Salesforce.com, which now has a base of 2 million users, as well as the offerings of Google Apps.

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Accounting Is a Super-Hot Career Field!

If you're looking for a sure thing in the labor market, consider accounting. This, according to a recent survey finding that 58 percent of finance and HR managers surveyed worldwide were concerned about losing their top performers. The Robert Half Global Financial Employment Monitor found 73 percent of U.S. respondents shared the concern—up from 46 percent last year.

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Bookkeeping Express partners with Intelligent Office

Bookkeeping Express has teamed with Intelligent Office to provide accounting services to small businesses in the D.C. area.

This is the first partnership in the area for the McLean-based bookkeeping company, which was acquired last year by Merritt Green, Bob Stocker and Greg Jones.

The owners moved the 20-year-old bookkeeping company's headquarters from California, and aligned the company with the American Institute of Professional Bookkeepers in Rockville. They plan to launch a national franchise system later this month.

Intelligent Office, a virtual office base that offers remote receptionist services, will provide bookkeeping services to its 800 small business clients in the D.C. area through the new partnership. Services include accounts payable and receivable, monthly reporting, and bank reconciliation.

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Survey finds shortage of accounting, finance workers

A majority of employers say they're having trouble finding qualified accounting and finance professionals for the second year in a row, according to a recent survey by Robert Half International.

Fifty six percent of finance and human resource managers surveyed reported shortages in those fields.

A greater number of those surveyed -- 73 percent versus 46 percent in 2007 -- said they're concerned about losing top performers to other opportunities.

More than 4,000 finance and human resources managers in 20 countries participated in the survey.

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Bookkeeping Express partners with Intelligent Office

Bookkeeping Express has teamed with Intelligent Office to provide accounting services to small businesses in the D.C. area.

This is the first partnership in the area for the McLean-based bookkeeping company, which was acquired last year by Merritt Green, Bob Stocker and Greg Jones.

The owners moved the 20-year-old bookkeeping company's headquarters from California, and aligned the company with the American Institute of Professional Bookkeepers in Rockville. They plan to launch a national franchise system later this month.

Intelligent Office, a virtual office base that offers remote receptionist services, will provide bookkeeping services to its 800 small business clients in the D.C. area through the new partnership. Services include accounts payable and receivable, monthly reporting, and bank reconciliation.

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Bookkeeping help: Bookkeeping tasks are Easily Managed

Accounting tasks are quite a problem when undertaken by in-house staff and become uncomplicated with the help of outsourcing. Since the accounting projects are of crucial importance for successfully running a venture, accounting firms regularly outsource the bookkeepers for this purpose. The financial records are maintained by the professionals which otherwise is considered a very hectic task involving innumerable number of calculations. To regularly update the accounts books, one needs to be thoroughly accurate with the numbers and their computations.

It is thus a wise decision to invest in the services of brilliant professionals who are known for their dedication and ethics. With their vast expertise collected over the years, the companies are able to touch the acme of growth immediately. Taking Bookkeeping help from the experts in this field ensures for an organization, availability of highly accurate data. This in turn, goes a long way to change the way a business is conducted and significantly contributes towards the decision making process by a business head.

For an optimum use of the resources, accounting professionals are hired by a corporate. This is done to reduce the chances of wastage of time and efforts on your part. Outsourcing increases the quality of projects since the professionals are armed with a vast expertise and take upon themselves to go in to the complex details contained therein. Bookkeeping help should only be sought from the well-established firms who are known for their accuracy and less charges.

Moreover, timely delivery of the projects is a standard followed by these professionals with deadly accuracy and hiring them is thus considered a best move by the organizations. Maintaining an internal staff comes with its own costs as far as the salary bit is concerned. Also, demands related to extra bonus from the in-house staff is what prompts an organizational head to take bookkeeping help. For a smaller firm, this is a boon as far as hiring the professional services of the bookkeepers are concerned.

Bookkeeping help is outsourced for a proper use of resources towards realizing growing aspirations of a company. References can be sought in this case from those firms, who have been the clients of these outsourcing companies. Since expansionism of the organizations is on the rise and needs a stable funding, it is important to curb the unnecessary expenditure. This ensures in turn, a proper regulation and outflow of cash which makes an organization capable of generating increasing revenue bases for themselves. The services offered by the professionals are unmatchable by any standard as the firms specialize in maintaining the bookkeeping records through appropriate software. The compiled and processed records of the daily transactions are then transferred by the accounting experts back to the client.

Internet is the perfect source of information as far as the selection of a right firm is concerned. Moreover, the proper selection of a firm ensures a regular tracking of the transaction in a business organization. This is made possible by the excellent expertise of the accounting professionals who check each and every detail by themselves. Handling the complex projects comes easily to them and any kind of mistake is duly looked into. This is done to ensure a flawless financial report from them, containing every detail related to the transactions in a company.

Alvis Brazma gives advice to business owners about how to manage their business efficiently without any hassles.To know more about Accounting help,accounting outsourcing, small business accounting, bookkeeping help visit this leading internet source: www.impacctusa.com

Bookkeeping Express partners with Intelligent Office

Bookkeeping Express has teamed with Intelligent Office to provide accounting services to small businesses in the D.C. area.

This is the first partnership in the area for the McLean-based bookkeeping company, which was acquired last year by Merritt Green, Bob Stocker and Greg Jones.

The owners moved the 20-year-old bookkeeping company's headquarters from California, and aligned the company with the American Institute of Professional Bookkeepers in Rockville. They plan to launch a national franchise system later this month.

Intelligent Office, a virtual office base that offers remote receptionist services, will provide bookkeeping services to its 800 small business clients in the D.C. area through the new partnership. Services include accounts payable and receivable, monthly reporting, and bank reconciliation.

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U.S. far from adopting global accounting standard

Why are auditors in Canada so keen on the idea?

The United States is not exactly known for bowing to peer pressure from the rest of the world, even when it means they must go it alone.

So when looking to a very similar situation like adopting a global accounting standard, it might be wise to take rumours of the United States falling quickly into line with a grain of salt.

This is not to say that there isn't a certain amount of U. S. interest in International Financial Reporting Standards (IFRS), especially from auditors, and also some companies and a few regulators. But such interest needs to be put into proper perspective.

For example, United Technologies is a member of the Dow 30 and operates in more than 200 countries. U. S. adoption of IFRS would allow the company to make certain acquisitions more easily, and would lower compliance costs, since many of its subsidiaries already file in IFRS or will need to eventually.

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No tax deduction at source on service tax?

You have been advising that payment to a service provider, which is inclusive of service tax, would require tax deduction at source on the entire amount, inclusive of service tax. In view of the Board’s Circular No. 4 of 2008 dated April 28, 2008, your answer would require revision. The Circular may be publicised for the benefit of readers.

The Central Board of Direct Taxes in Circular No. 4 of 2008 dated April 28, 2008, has responded to a request for clarification as to whether service tax should be included in rent for tax deduction at source under Sec. 194-I in the following words:

“3. Service tax paid by the tenant does not partake of the nature of “income” of the landlord. The landlord only acts as a collecting agency for the Government for collection of service tax.

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UK accounting and finance professionals shortage less pronounced than rest of world

The UK is the only major economy not to have experienced an increase in the shortage of skilled accounting and finance professionals, a new survey has found.

However, 43 per cent of hiring managers in Britain are still finding it difficult to recruit experienced staff in this field, according to the Robert Half Global Financial Employment Monitor.

Online Recruitment reports that this is down from 53 per cent last year.

Of the 20 countries surveyed, an average of 56 per cent of employers admitted to struggling to find qualified professionals. In addition, 58 per cent raised concerns about retention of staff.

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A new franchise opportunity has been launched in the US

US bookkeeping franchise Bookkeeping Express is planning to expand nationwide. The company, which was recently purchased by three entrepreneurs in Virginia, provides a range of bookkeeping services and plans to launch a national franchising system this month.

Greg Jones, CEO of Bookkeeping Express, said: "Bookkeeping Express plans to revolutionise bookkeeping in America. In a business world where payroll is dominated by national companies like Paychex, and tax preparation is synonymous with H&R Block, we see our company becoming the recognised provider for business bookkeeping services.

"Our franchise will provide businesses throughout the US with a reliable, affordable source for excellent bookkeeping services. We will focus on in-house financials, operating as an authorised QuickBooks affiliate. We will charge by the transaction so that our customers can have a complete understanding of what work has been completed and at what price."

Source : http://www.franchise-international.net/

Tax Breaks A Boon For Small Business?

The New York Times ran an article yesterday "With Stimulus Package, the Big Winner Could Be Small Business", which discussed how the government's tax cuts could help small business more than any other economic sector.

There is so much conjecture out there about how to weather this economic downturn. Some advocate the retreat/retrench approach as the future is uncertain. Others advocate the spend, spend, spend approach because the economic stimulus package will benefit your company in the long run.

THE REAL WORLD RETAILING TAKEAWAY

Be proactive. Successful business owners are aware of their opportunities and are in a constant state of evaluation.

A looming economic crisis doesn't mean you close the shutters and wait for the storm to pass. It means you prepare - you figure out your plan of action. If the storm hits, you take a specific action based on your plan. And then you have to be in a constant state of evaluation to plot your next move based on the direction the storm is moving, how close it's hitting to home, the severity of it and more. While we aren't always able to predict these things, being prepared will go a long way toward your business making it through unscathed (or only with minor injuries).

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Canada: Accounting industry grows

The country's accounting industry continued its strong growth in 2006, Statistics Canada said yesterday. The federal agency said accounting operating revenues grew 12.1 per cent to $11.1 billion in 2006. That followed 13.7- per-cent growth the previous year. Most of the revenues in 2006 came from traditional accounting services such as auditing and assurance (30 per cent), taxation (25 per cent), and bookkeeping and payroll (11 per cent).

Source : http://www.canada.com/

New Accounting Guidance for Earnings-per-share

Set to take effect at the end of the year, FASB clarifies the accounting treament for share-based payment awards.

The staff of the Financial Accounting Standards Board (FASB) has, it seems, increased the rate at which accounting guidance is being issued. The latest offering involves a clarification of the manner in which earnings per share (EPS) is calculated for entities which have issued "participating securities," in addition to common stock,

Indeed, FAS 128, Earnings Per Share, defines EPS as "the amount of earnings attributable to each share of common stock." The board decided to require, with respect to the computation of EPS, the use of the so-called "two class method" in the case of enterprises with participating securities. The two-class method (see paragraph No. 59 of FAS 128) is an earnings allocation formula that determines EPS for each class of common stock and participating securities according to dividends distributed and participation rights in undistributed earnings.

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2008 Review of Small Business Accounting Systems

Helping SMBs Achieve Success: Programs Enhance Accountant Controls & Data Integrity Features

Accountants who provide services to small businesses frequently find themselves in the role of diagnostician, trying to find out why a particular client is hemorrhaging cash and what the short- and long-term chances of survival are for the company. They also assist in determining what strategies will best brace the entity and help develop financial processes that are sound and grounded in solid accounting practices. This is a critical role because when challenges are recognized early enough, problems can be averted or minimized.

But still, a 2007 study by the Bureau of Labor Statistics cites that more than half of small businesses (56 percent) fail before lasting four years. Among the most failure-likely industries are hospitality (particularly restaurants and bars), transportation and apparel. While these sectors may stand out as the most vulnerable, all small businesses are at risk since they face a myriad of challenges such as cash flow, budgeting and strategic planning. And they frequently rely upon individuals with limited financial and business management experience.

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Accounting Plan Would Allow Use of Foreign Rules

WASHINGTON — Federal officials say they are preparing to propose a series of regulatory changes to enhance American competitiveness overseas, attract foreign investment and give American investors a broader selection of foreign stocks.

But critics say the changes appear to be a last-ditch push by appointees of President Bush to dilute securities rules passed after the collapse of Enron and other large companies — measures that were meant to forestall accounting gimmicks and corrupt practices that led to those corporate failures.

Legal experts, some regulators and Democratic lawmakers are concerned that the changes would put American investors at the mercy of overseas regulators who enforce weaker rules and may treat investment losses as a low priority.

Foreign regulators are beyond the reach of Congress, which oversees American securities regulation through confirmation proceedings, enforcement hearings and approval of the Securities and Exchange Commission’s budget.

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Another bad week for finance companies

Finance company investors endured another stretch of rocky road this week, with more losses, some companies failing to comply with listing rules and a director fighting to hang on to his money.

Restructured Geneva Finance ended its debut week on the sharemarket with its shares at less than a third of their issue value.

The shares were untraded on their first day on the NZAX board on Tuesday, but closed at 13c on Wednesday and slumped 23 per cent on Thursday to just under 10c.

The stock ended the week at 11c, valuing the company at just under $7.7 million.

Investors had agreed to convert 15 per cent of the $98.4 million in debenture funds and $11.5 million owed to note holders into new shares at a rate of one share for 36.49c. Geneva would repay the balance of the money by instalments over 4 1/2 years for debenture holders and 5 1/2 years for note holders.

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High demand for qualified bookkeeping and accounting candidates as Pastel People takes off

Pastel People, Softline Pastel's new recruitment division launched in March 2008, has found that demand for certified bookkeepers and accountants is increasing steeply as the economy tightens, the skills shortage intensifies and accounting legislation becomes more onerous.

The division was established in response to requests from Pastel's 180 000 customers and 3 500 business partners for Pastel to recommend either suitable candidates or a recruitment agency - and is geared to finding Pastel-qualified bookkeepers and accountants for customers, Pastel business partners, and Softline Pastel itself.

Customer response to the establishment of Pastel People was so strong that in March and April alone it received more than 128 job specifications.

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