7 Accounting Tips for Beginning Businesses

We have the smartest and the most clever accountant in the world. So we asked him to write an article about starting a business and the accounting setup needed. Here's what he wrote, it's solid advice from an accountant that saves us tons of money.

1. KISS. Keep it simple starting out. The simplest form of entity for running your first business is called a sole proprietorship. This form of ownership requires NO special communication or filings to the Internal Revenue Service until you start paying employees.

2. As a sole proprietor you are the owner/entity which might require only to acquire an occupational license if your county or municipality mandates one. As the owner, you are also liable to remit all state or city tax collections on retail or wholesale sales your business collects. Service businesses and most cross state sales are exempt from state tax collections.

3. If you are concerned about personal liability as a sole proprietorship then do the cheapest and simplest thing which is to buy a personal liability umbrella policy. The best way to avoid liability is to learn your trade well and keep accurate records on Less Accounting.

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Ten Tips for a Smoother, More Profitable Tax Season

At the beginning of every tax season, I have the best intentions. I exercise, eat right, and get enough sleep. Then it happens. Two-thirds of the way through the busiest months, something really big goes wrong, and my balanced life snowballs into chaos. Does this happen to you?

Even if something doesn't go wrong, you might be the type of person who reaches the edge of burnout every year at the end of tax season. You might hate the high-pressure, deadline-riddled, fast-paced environment. How can you find your balance amid the chaos? Here are ten tips to help you survive this season.

1. Remember why you're there in the first place. Our business is an excruciatingly detail-oriented affair, and it's easy to get caught up in the minutiae of the moment. When you realize you're drowning in details, stop, take a deep breath, and take in the big picture. Think about what your overarching business and personal goals are. Remind yourself of your friends and family. This exercise will help you reframe what's really important to you and will help you put the daily details back into the right perspective.
   
   
2. Communicate your appreciation. Without a team to help you get your work done, tax season would be much harder. Show your gratitude to your team (and your family) with frequent positive comments, ranging from the general "I really appreciate the work you do" to the specific "Your spreadsheet covering the Cassidy project was very well thought out."
   
   Do this more often than you think you need to. People can't get enough personal feedback in this digitally detached world. Praise keeps the stress level down in the office. It will give you a lift too: gratitude is one of the fastest ways to change your mood for the positive.
   
   
3. Systematize your processes. Lost productivity and mistakes often stem from misunderstood responsibility and authority. A smooth tax season starts when everyone knows the flow of work, what their jobs are, and how much authority they have to make decisions. Make all of these items clear by designing systems, processes, and procedures that your team can follow.
   
   
4. Train, train, train. Inevitably, one of your team members will get sick, pregnant, or resign at exactly the wrong time. Cross-training your team to be able to do each others' jobs will save you time and reduce your stress. It's hard to stop and make time for training, but there are rewards to taking the extra time. Your employee feels more empowered and becomes more valuable once the new skill has been mastered. The next time the skill is required, you can delegate the task and free up your time.
   
   
5. Just say "no." Saying "no" can be difficult for some people. But I promise you will get at least one client who will try to monopolize your schedule at the last minute, will not have all the input you need so that you have to start and stop five times on the work, and will insist on a bargain price!
   
   Set deadlines for client input. Be able to say "no" to unreasonable requests. You'll be able to help five clients in the time one unruly client takes up, and your profitability will soar.
   
   
6. Commute calmly. On your way to and from work, listen to an upbeat music CD, a comedy act, or a motivational tape. You'll be in a better mood no matter what the traffic was like. Buy CDs for your staff, too.
   
   
7. Perk up your staff. A great way to de-stress your office is to add some perks, and I don't just mean bringing in a few sugar-laden sweet rolls in the morning. In the middle of your busiest time, consider some of the following ideas:
   
   
   • Bring in a masseuse who can do ten-minute neck and shoulder massages during lunch.
   • Hire a personal assistant who can be shared among your employees to help them with errands like dry cleaning pickups, grocery runs, and gift shopping.
   • Send employees' spouses a wonderful appreciation gift.
   • Supply healthy in-office snacks and meals that build energy rather than drain it.
     
     
8. Prioritize. If you begin to feel overwhelmed, get organized. Prioritize your to-do list, and work it, one at a time. When you cross a task off, do a little dance or shout a "Woohoo!" Make sure your staff is clear on their priorities, too.
   
   
9. Take the high road. In a high-pressure environment, we're often tightly wound. It doesn't take more than a small slight from another to set us off into a rampage. If you're prone to reactive behavior, it will help to understand a quick fact about how your brain is wired. We have two pathways in our brain:
   
   1. The low road (the fast pathway) to reaction that is wired directly from our senses to our emotion center. This is what keeps us alive when we swerve quickly to avoid a car accident or when we notice a snake on the ground. It also gets activated when we might feel a bit threatened at work.
      
   2. The high road (the slower pathway) that is wired to the reasoning center in our brain. Here we can take the time to analyze, process, and react accordingly to what's happening in our environment.
      
   
   If someone says something to you that activates your "low road," become aware of it, take a breath, and if there is no immediate danger of dying, let your "high road" catch up before you say or do anything.
   
   
10. Model leadership. Emotions are contagious. So is stress. If you are in a negative mood, everyone in your office won't be far behind. But if you come in every morning in a calm and cheerful mood and with your sense of humor intact, you can influence the whole office to follow your lead. It's a lot more fun for everyone to work in a cheerful office.
    

When you and your employees are happier and de-stressed, you'll be more productive, do better work, make fewer mistakes, and be healthier, too. I wish you a joyful and profitable tax season.

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Tips On Starting Your Accounting Career

Accounting is the language of business. Its knowledge is fundamental to any businessperson that seeks to plan expenditure and strive for a profit. Most business professionals are therefore required to study some accounting. Accounting professionals interact with all levels of a business and for many it's a very interesting job.

Eligibility

• Individuals with an analytical approach and technical expertise of accounting, good mathematical aptitude, knowledge of the technicalities of a business system and those who are well versed with computers.
• Basic eligibility is 4 years of college for a professional degree in accounting or a related field.
• A Bachelor's degree with a minor in another subject from an accredited college or university to apply for the Master's in accounting.
• People who have done their course in accounting over the Internet are also eligible for jobs in the accounting industry.
• In terms of job, prior experience as a trainee auditor or accountant can also help.
• Different courses and licenses require accreditations and licenses of certain organizations. For example, Certified Public Accountants (CPA) should have a license by the State Board of Accountancy (STA).
• A certain number of semester hours plus work hours are considered for 4-year bachelor's degree.
• Public accountants are taken as trainees. Management Accountants start as junior internal auditors or cost accountants.
• A master's degree in business administration (MBA) is preferred by many companies.
  

Types Of Accounting Jobs

• After a degree in accounting, one could qualify for a certified public accountant (CPA) or registered public accountant (RPA) license. Even though many do not have a license, they do get jobs as auditors or accountants in government offices or private companies.
• In the long run, one could excel to a position like chief financial officer (CFO).
• A certified accounting professional could become an auditor, financial officer, management accountant, budget analyst, or tax accountant. Tax accountants are preferred with a legal background.
• An independent job could prosper if the individual has a good network of contacts.
• There are specializations in accounting; for example, the forensic accounting where the accountant investigates the different crimes breeding on the company's finances.
• Teaching accounting can also be a good career option.
  

Tips On Starting a Career in Accounting

Following are a few tips on getting started

1. Decide which field of accounting you would like to get into.
2. Research related information and shortlist colleges and universities for the given courses.
3. Consult accountants or even teachers who have knowledge of the subject.
4. Enroll in a bachelor's degree or course in accounting.
5. Start off as a trainee after getting a degree from a college. Most of the companies look for an accredited college.
6. Keep looking for hiring by the major companies of the industry.
7. Update your work knowledge according to the industry standards.
   

Accountants have a decisive role in the future of a company. Budgeting and adjusting according to the current market trends is one of the analytical decisions an accountant makes. Because they are problem solvers, the company can rely on an accountant to sort out any financial problems.

About The Author

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution's Six Sigma Online ( http://www.sixsigmaonline.org ) offers online six sigma training and certification classes for lean six sigma, black belts, green belts, and yellow belts.

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Bookkeeping and Accounting Basics

Bookkeeping and accounting share two basic goals:

• to keep track of your income and expenses, thereby improving your chances of making a profit
• to collect the necessary financial information about your business to file your various tax returns and local tax registration papers
  

Sounds pretty simple, doesn't it? And it can be, especially if you remind yourself of these two goals whenever you feel overwhelmed by the details of keeping your financial records. Hopefully you will also be reassured to know that there is no requirement that your records be kept in any particular way. (There is a requirement, however, that some businesses use a certain method of crediting their accounts. See " Cash vs. Accrual Accounting.") In other words, there's no official "right" way to organize your books. As long as your records accurately reflect your business's income and expenses, the IRS will find them acceptable.

The actual process of keeping your books is easy to understand when broken down into three steps.

1. Keep receipts or other acceptable records of every payment to and every expenditure from your business.
2. Summarize your income and expenditure records on some periodic basis (generally daily, weekly, or monthly).
3. Use your summaries to create financial reports that will tell you specific information about your business, such as how much monthly profit you're making or how much your business is worth at a specific point in time.
   

Whether you do your accounting by hand on ledger sheets or use accounting software, these principles are exactly the same.

Step 1: Keeping Your Receipts
Comprehensive summaries of your business's income and expenses are the heart of the accounting process. But they can't legally be created in a vacuum. Each of your business's sales and purchases must be backed by some type of record containing the amount, the date, and other relevant information about that sale. This is true whether your accounting is done by computer or on hand-posted ledgers.

From a legal point of view, your method of keeping receipts can range from slips kept in a cigar box to a sophisticated cash register hooked into a computer system. Practically, you'll want to choose a system that fits your business needs. For example, a small service business that handles only relatively few jobs may get by with a bare-bones approach. But the more sales and expenditures your business makes, the better your receipt filing system needs to be. The bottom line is to choose or adapt one to suit your needs.

Step 2: Setting Up and Posting Ledgers
A completed ledger is really nothing more than a summary of revenues, expenditures, and whatever else you're keeping track of (entered from your receipts according to category and date). Later, you'll use these summaries to answer specific financial questions about your business such as whether you're making a profit, and if so, how much.

You'll start with a blank ledger page (a sheet with lines) or, more often these days, a computer file of empty rows and columns. On some regular basis like every day, once a week, or at least once a month, you should transfer the amounts from your receipts for sales and purchases into your ledger. Called "posting," how often you do this depends on how many sales and expenditures your business makes and how detailed you want your books to be.

Generally speaking, the more sales you do, the more often you should post to your ledger. A retail store, for instance, that does hundreds of sales amounting to thousands or tens of thousands of dollars every day should probably post daily. With that volume of sales, it's important to see what's happening every day and not to fall behind with the paperwork. To do this, the busy retailer should use a cash register that totals and posts the day's sales to a computerized bookkeeping system at the push of a button. A slower business, however, or one with just a few large transactions per month, such as a small Web site design shop, dog-sitting service, or swimming pool repair company, would probably be fine if it posted weekly or even monthly.

To get started on a hand-entry system, get ledger pads from any office supply store. Alternatively, you can purchase an accounting software program that will generate its own ledgers as you enter your information. All but the tiniest new businesses are well advised to use an accounting software package to help keep their books (and micro-businesses can get by with personal finance software such as Quicken). That's because once you've entered your daily, weekly, or monthly numbers, accounting software makes preparing monthly and yearly financial reports incredibly easy.

Step 3: Creating Basic Financial Reports
Financial reports are important because they bring together several key pieces of financial information about your business. Think of it this way -- while your income ledger may tell you that your business brought in a lot of money during the year, you may have no way of knowing whether you turned a profit without measuring your income against your total expenses. And even comparing your monthly totals of income and expenses won't tell you whether your credit customers are paying fast enough to keep adequate cash flowing through your business to pay your bills on time. That's why you need financial reports: to combine data from your ledgers and sculpt it into a shape that shows you the big picture of your business.

Source : http://www.inc.com/