Bookkeeping From Your Home Business

1. Find an accounting software program to help track your finances. I recommend QuickBooks which is quick and easy to learn & use, as well as relatively inexpensive. However, don't solely rely on a computer based program. I highly recommend you also keep a separate manual check register as back up.
   
   
2. Determine which accounting system will work best for your business:
   
   
   • Cash based: You record your income & expenses as you pay or are paid. For example, Tom allowed a customer to purchase an item on credit. He wrote an IOU for the transaction, but won't enter it into his accounting system until his customer comes in next week to pay him the balance. Today is also the day Tom makes his weekly check run to pay off any invoices that are going to be due. He won't enter the transactions until after he has written the checks.
     
     
   • Accrual based (which I personally recommend): You track all income & expenses as they happen, not when actual payment is made or received. This is a little more complicated than the cash based system, but it will allow you to know where your company stands financially at all times. For example, Mary made a sale today based on her customers credit. Although she hasn't physically received cash yet, she did make a sale and will enter it into her accounting system. She also received an invoice from the electric department. Even though she won't pay the invoice for a few weeks, she still enters it.
     
   
   
3. Keep all supporting documents and staple them to the corresponding check stub or copy of a customers invoice. Supporting documents may include purchase orders, invoices, receipts, notes logging conversations, etc. These will be especially useful in the event of an audit.
   
   
4. Reconcile (balance) your bank statement every month. This assures that your business records and bank balance will be in sync. Always review cancelled checks before you allow anyone else to see them (including your accountant). This will alert you if any unauthorized checks are being written. Also, try to find a bank who's monthly cut-off date is the last day of the month. This will make reconciling much easier.
   
   
5. Make sure to review your company's balance and income & expense reports each month. These will allow you to know where your company stands financially.
   

Anita DeFrank, owner of MommysHelperOnline.Com is a busy work at home mom. MommysHelperOnline.com is the leading resource available online built to assist you with your home business. Whether you're brand new to the work at home game or you're an old pro, they can help.

Top Ten Accounting Outsourcing Tips

Businesses of all sizes need to ensure that accounting is paid due attention, since accounting it is at the core of any business process. In recent times more and more small and medium size businesses are considering accounting outsourcing. The decision to outsource accounting and bookkeeping allows a company to concentrate in their area of specialization and not worry about the accounting aspect of the business. Outsourcing has several advantages and these include the following:

• The services of experts are available at a fraction of what would have been paid to hire them on a full time or part-time basis.
• Outsourcing relieves the company of the tedious and yet crucial process of accounting bookkeeping.
• When a company considers outsourcing not only does it not bother with recruitment of accounting professionals but also saves on office space and related expenditure.
  

An offshore accounting outsourcing service provider provides reliable and competent services that are an asset to the company and simplify its working.

When outsourcing small business accounting and finance it is important to keep certain tips in mind in order to make informed decisions:

1. Be clear about what you expect of the accounting company that you are outsourcing to. It is vital that you specify the needs of the job and what you expect from the outsourcing service provider. This will ensure that both companies have a clear understanding of what is expected and what is being delivered.
   
   
2. Is the accounting outsourcing company reliable and dependable?
   Do not make a decision blindly, but in fact take the time and effort to check on the references provided by the outsourcing company. Accounting needs to be done by certified public accountants and in case of offshore outsourcing you need to confirm that the accountants are qualified to handle and provide accounting solutions.
   
   
3. Don't shy away from asking the vendor about similar accounting management projects that they have worked on. You don’t want a trial and error technique used on your small business accounting. It would be a good idea to ask the accountants to provide material that indicates their skill and knowledge of accounting, auditing and bookkeeping.
   
   
4. Reviewing previous projects that the vendor has done will give you a fair idea of the level and quality of accounting that they can deliver. You could also ask the accountants as to how they would like to handle the accounting information, so that you can judge their line of thinking and working. It is also recommended that you initially start with a pilot project that will assure you of the services that you have been promised.
   
   
5. While the total cost may be a guiding factor when you are selecting an accounting company, it should not be the only factor. The lowest bidder need not always be the best bet. Accounting and any deficiencies in the process can create serious legal problems for the business and you would not want to risk that. A large percentage of small and medium businesses that have turned to accounting outsourcing have done so not just because of the low costs but also due to the quality of work that they are assured.
   
   
6. It is important that you have a contract drawn up that clearly specifies what is expected of the project and how and when it will be completed. Such an understanding facilitates transparency in the dealings with the outsourcing accounting service provider.
   
   
7. Start with a small project and take it from there. To begin with provide a small amount of work and allow the outsourcing accounting company to prove its caliber.
   
   
8. Creating milestones in the project will help create a smooth flow of work to its completion. Also this ensures that both parties are clear on the deadlines and required work. Furthermore it allows the company to make payments in installments as and when the work is completed.
   
   
9. Security issues need to be discussed upfront and you need to be clear on the security measures taken by the accounting outsourcing company to protect crucial accounting data. Accounting information is crucial to the success of every business and any leak of such information can have drastic consequences. You would need to discuss how accounting, auditing and bookkeeping files will be transferred securely to the outsourcing company and also issues such as how accountants will have access to these files.
   
   
10. Communication with the accounting outsourcing firm is of utmost importance and you should be able to interact and communicate freely. Thus the service provider ought to have communication facilities that are satisfactory and should be easily contacted.
    

Accounting outsourcing should ideally be an asset for any small or medium business. And keeping these tips in mind can make that a reality.

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EU says to relax mark-to-market accounting rules

Banks in the European Union will be allowed to skirt an accounting rule blamed by critics for exacerbating the impact of the credit crunch and triggering fire sales of assets, EU president France said on Tuesday.

EU finance ministers agreed to change how the mark-to-market rule is applied in the third quarter so that European banks are treated in the same way as their U.S. competitors in the face of the worst financial crisis in 80 years.
Under U.S. accounting rules, banks in rare circumstances can move an asset from their trading book, where assets are valued on a mark-to-market basis, to their bank book, where assets are held to maturity and valued at cost.

The U.S. authorities formally encouraged this last week to ease the pain on banks facing an uphill task to recapitalise.

"In accounting, the American groups are authorised to transfer assets from their trading book, where they evaluate assets at mark-to-market," said Christine Lagarde, finance minister for France, which currently holds the rotating EU presidency.

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