Skip to main content Skip to search

Archives for Accounting

Great Ways to Keep Track of your Finances

In today’s busy world, it can be difficult to monitor and manage your financial health. Keeping track of your finances involves more than simply knowing how much is in your account or making sure you pay the rent or mortgage on time. There are a number of ways that anyone can utilize to better manage their money that includes the following, in no particular order.

Accurate Budgeting

A budget doesn’t mean you can’t spend for fun. It does mean that you need to account for the must-pay expenses first, such as rent, car payments, utilities, groceries, and insurance premiums. The remainder will provide information on major expenditures ad areas where you might save.

The Little Things

Small expenses are the bane of a budget. They nibble away at money that you could be saving and they account for a significant amount of money each day. Some of those small expenses include eating lunch out, whether it’s by yourself or with co-workers, or designer coffees and juices. Start saving receipts from each purchase and total them up at the end of the month or use a debit card for each purchase so you can go back and identify each one on your bank statement.

Savings

Everyone should have a savings goal whether it’s for a major purchase or for retirement purposes. If your budget doesn’t have a category for savings, create one. It can be any amount you want, but financial advisers recommend a set percentage of your income. Don’t be tempted to draw upon your savings. If you have extra money at the end of the month, shift it to your savings.

Software

There are dozens of software programs that will help you budget your money, track expenditures, and even send you alerts via mobile device so it’s easy to manage your money on the go with today’s busy lifestyles.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

Contact Us Today

Read more

What are Auditors?

Accountants and auditors help to ensure that the Nation’s firms are run efficiently, its public records kept accurately, and its taxes paid properly and on time. They perform these vital functions by offering an increasingly wide array of business and accounting services, including public, management, and government accounting, as well as internal auditing, to their clients. Beyond carrying out the fundamental tasks of the occupation-preparing, analyzing, and verifying financial documents in order to provide information to clients-many accountants now are required to possess a wide range of knowledge and skills. Accountants and auditors are broadening the services they offer to include budget analysis, financial and investment planning, information technology consulting, and limited legal services.

Specific job duties vary widely among the four major fields of accounting: public, management, and government accounting and internal auditing.

Internal auditors verify the accuracy of their organization’s internal records and check for mismanagement, waste, or fraud. Internal auditing is an increasingly important area of accounting and auditing. Internal auditors examine and evaluate their firms’ financial and information systems, management procedures, and internal controls to ensure that records are accurate and controls are adequate to protect against fraud and waste. They also review company operations, evaluating their efficiency, effectiveness, and compliance with corporate policies and procedures, laws, and government regulations. There are many types of highly specialized auditors, such as electronic data-processing, environmental, engineering, legal, insurance premium, bank, and health care auditors. As computer systems make information timelier, internal auditors help managers to base their decisions on actual data, rather than personal observation. Internal auditors also may recommend controls for their organization’s computer system, to ensure the reliability of the system and the integrity of the data.

 

Government accountants and auditors work in the public sector, maintaining and examining the records of government agencies and auditing private businesses and individuals whose activities are subject to government regulations or taxation. Accountants employed by Federal, State, and local governments guarantee that revenues are received and expenditures are made in accordance with laws and regulations. Those employed by the Federal Government may work as Internal Revenue Service agents or in financial management, financial institution examination, or budget analysis and administration.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

Contact Us Today

Read more

How to Analyze a Financial Statement

Its obvious financial statements have a lot of numbers in them and at first glance, it can seem unwieldy to read and understand. One way to interpret a financial report is to compute ratios, which means, divide a particular number in the financial report by another. Financial statement ratios are also useful because they enable the reader to compare a business’s current performance with its past performance or with another business’s performance, regardless of whether sales revenue or net income was bigger or smaller for the other years or the other business. In order words, using ratios can cancel out differences in company sizes.

 

There aren’t many ratios in financial reports. Publicly owned businesses are required to report just one ratio (earnings per share, or EPS) and privately-owned businesses generally don’t report any ratios. Generally accepted accounting principles (GAAP) don’t require that any ratios be reported, except EPS for publicly owned companies.

 

Ratios don’t provide definitive answers, however. They’re useful indicators but aren’t the only factor in gauging the profitability and effectiveness of a company.

 

One ratio that’s a useful indicator of a company’s profitability is the gross margin ratio. This is the gross margin divided by the sales revenue. Businesses don’t disclose margin information in their external financial reports. This information is considered to be proprietary in nature and is kept confidential to shield it from competitors.

 

The profit ratio is very important in analyzing the bottom-line of a company. It indicates how much net income was earned on each $100 of sales revenue. A profit ratio of 5 to 10 percent is common in most industries, although some highly price-competitive industries, such as retailers or grocery stores will show profit ratios of only 1 to 2 percent.

 

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

Contact Us Today

Read more

Revenue and receivables

In most businesses, what drives the balance sheet are sales and expenses. In other words, they cause the assets and liabilities in a business. One of the more complicated accounting items are the accounts receivable. As a hypothetical situation, imagine a business that offers all its customers a 30-day credit period, which is fairly common in transactions between businesses, (not transactions between a business and individual consumers).

An accounts receivable asset shows how much money customers who bought products on credit still owe the business. It’s a promise of case that the business will receive. Basically, accounts receivable is the amount of uncollected sales revenue at the end of the accounting period. Cash does not increase until the business actually collects this money from its business customers. However, the amount of money in accounts receivable is included in the total sales revenue for that same period. The business did make the sales, even if it hasn’t acquired all the money from the sales yet. Sales revenue, then isn’t equal to the amount of cash that the business accumulated.

To get actual cash flow, the accountant must subtract the amount of credit sales not collected from the sales revenue in cash. Then add in the amount of cash that was collected for the credit sales that were made in the preceding reporting period. If the amount of credit sales a business made during the reporting period is greater than what was collected from customers, then the accounts receivable account increased over the period and the business has to subtract from net income that difference.

If the amount they collected during the reporting period is greater than the credit sales made, then the accounts receivable decreased over the reporting period, and the accountant needs to add to net income that difference between the receivables at the beginning of the reporting period and the receivables at the end of the same period.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

Contact Us Today

Read more
accounting firm Conway South Carolina

What is Forensic Accounting?

Forensic accounting is the practice of utilizing accounting, auditing, and investigative skills to assist in legal matters.  It encompasses 2 main areas – litigation support, investigation, and dispute resolution.

Litigation support represents the factual presentation of economic issues related to existing or pending litigation.  In this capacity, the forensic accounting professional quantifies damages sustained by parties involved in legal disputes and can assist in resolving disputes, even before they reach the courtroom.  If a dispute reaches the courtroom, the forensic accountant may testify as an expert witness.

Investigation is the act of determining whether criminal matters such as employee theft, securities fraud (including falsification of financial statements), identity theft, and insurance fraud have occurred.  As part of the forensic accountant’s work, he or she may recommend actions that can be taken to minimize future risk of loss.  Investigation may also occur in civil matters.  For example, the forensic accountant may search for hidden assets in divorce cases.

Forensic accounting involves looking beyond the numbers and grasping the substance of situations.  It’s more than accounting…more than detective work…it’s a combination that will be in demand for as long as human nature exists.  Who wouldn’t want a career that offers such stability, excitement, and financial rewards?

In short, forensic accounting requires the most important quality a person can possess: the ability to think.  Far from being an ability that is specific to success in any particular field, developing the ability to think enhances a person’s chances of success in life, thus increasing a person’s worth in today’s society.   Why not consider becoming a forensic accountant?

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

Contact Us Today

Read more

Bookkeeping Basics

Most people probably think of bookkeeping and accounting as the same thing, but bookkeeping is really one function of accounting, while accounting encompasses many functions involved in managing the financial affairs of a business. Accountants prepare reports based, in part, on the work of bookkeepers.

Bookkeepers perform all manner of record-keeping tasks. Some of them include the following:

They prepare what are referred to as source documents for all the operations of a business – the buying, selling, transferring, paying and collecting. The documents include papers such as purchase orders, invoices, credit card slips, time cards, time sheets and expense reports. Bookkeepers also determine and enter in the source documents what are called the financial effects of the transactions and other business events. Those include paying the employees, making sales, borrowing money or buying products or raw materials for production.

Bookkeepers also make entries of the financial effects into journals and accounts. These are two different things. A journal is the record of transactions in chronological order. An accounts is a separate record, or page for each asset and each liability. One transaction can affect several accounts.

Bookkeepers prepare reports at the end of specific period of time, such as daily, weekly, monthly, quarterly or annually. To do this, all the accounts need to be up to date. Inventory records must be updated and the reports checked and double-checked to ensure that they’re as error-free as possible.

The bookkeepers also compile complete listings of all accounts. This is called the adjusted trial balance. While a small business may have a hundred or so accounts, very large businesses can have more than 10,000 accounts.

The final step is for the bookkeeper to close the books, which means bringing all the bookkeeping for a fiscal year to a close and summarized.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

Contact Us Today

Read more

Making a Profit 

Accountants are responsible for preparing three primary types of financial statements for a business. The income statement reports the profit-making activities of the business and the bottom-line profit or loss for a specified period. The balance sheets reports the financial position of the business at a specific point in time, ofteh the last day of the period. and the statement of cash flows reports how much cash was generated from profit what the business did with this money.

Everyone knows profit is a good thing. It’s what our economy is founded on. It doesn’t sound like such a big deal. Make more money than you spend to sell or manufacture products. But of course nothing’s ever really simple, is it? A profit report, or net income statement first identifies the business and the time period that is being summarized in the report.

You read an income statement from the top line to the bottom line. Every step of the income statement reports the deduction of an expense. The income statement also reports changes in assets and liabilities as well, so that if there’s a revenue increase, it’s either because there’s been an increase in assets or a decrease in a company’s liabilities. If there’s been an increase in the expense line, it’s because there’s been either a decrease in assets or an increase in liabilities.

Net worth is also referred to as owners’ equity in the business. They’re not exactly interchangeable. Net worth expresses the total of assets less the liabilities. Owners’ equity refers to who owns the assets after the liabilities are satisfied.

These shifts in assets and liabilities are important to owners and executives of a business because it’s their responsibility to manage and control such changes.  Making a profit in a business involves several variables, not just increasing the amount of cash that flows through a company, but management of other assets as well.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

Contact Us Today

Read more

Building Cash Reserves

Building a financial cushion for your business is never easy. Experts say that businesses should have anywhere from six to nine months worth of income safely stored away in the bank. If you’re a business grossing $250,000 per month, the mere thought of saving over $1.5 million dollars in a savings account will either have you collapsing from fits of laughter or from the paralyzing panic that has just set in. What may be a nice well-advised idea in theory can easily be tossed right out the window when you’re just barely making payroll each month. So how is a small business owner to even begin a prudent savings program for long-term success?

Realizing that your business needs a savings plan is the first step toward better management. The reasons for growing a financial nest egg are strong. Building savings allows you to plan for future growth in your business and have ready the investment capital necessary to launch those plans. Having a source of back-up income can often carry a business through a rough time.

When market fluctuations, such as the dramatic increase in gasoline and oil prices, start to affect your business, you may need to dip into your savings to keep operations running smoothly until the difficulties pass. Savings can also support seasonal businesses with the ability to purchase inventory and cover payroll until the flush of new cash arrives. Try to remember that you didn’t build your business overnight and you cannot build a savings account instantly either.

Review your books monthly and see where you can trim expenses and reroute the savings to a separate account. This will also help to keep you on track with cash flow and other financial issues. While it can be quite alarming to see your cash flowing outward with seemingly no end in sight, it’s better to see it happening and put corrective measures into place, rather than discovering your losses five or six months too late.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

Contact Us Today

Read more

Are You Ready For Tax Day?

Because deadlines are strict, and penalties will be given to late tax payments, you should make sure that you do not put off your “tax day.”  You should definitely start preparing your income tax return well before April 15. Whether you are doing your own income tax return or you are getting the help of a certified public accountant or firm to prepare your income tax return, you should get a few things together before you begin or meet with the CPA.

The main thing you will need for your income tax return is proof of the income you made and the taxes you paid in the previous year.  That includes income made through employers, interest from accounts, dividends from investments, income made through self-employment, income made as a subcontractor, and any other income.  Student loans and other types of loans may also be considered income for the purposes of income tax, as can winnings from a lottery, casino, or other contest. If you are unsure about what can be considered as income for tax purposes, you should contact a certified public accountant.

The other thing that is important is social security numbers for everyone you will claim on your income tax return.  That includes social security numbers for your spouse and any children you will claim. Without social security numbers, proof of residence, and birth dates, you cannot claim deductions on your income tax return for these individuals.

The next thing that you should gather is what you will need for deductions.  If you have a mortgage, your interest paid to the mortgage company may be tax-deductible.  If you use a vehicle for business purposes, you can claim a tax deduction for mileage. If you have children in daycare so that you can work, you can claim a tax deduction for that expense.  You can also claim tax deductions for excessive medical expenses and charitable contributions.  

If you are self-employed, you will need to also gather your receipts for tax-deductible expenses.  A tax-deductible business expense is any expense that is used solely or primarily for the business you are involved in.  The tax-deductible expense must be documented in order to claim it, so any receipts you have, usage logs for computers and vehicles, etc. should be gathered so that you can take the highest deduction possible.  If you have any doubts about what is tax-deductible for your business, you should contact a certified public accountant to assist you in your income tax preparation.

Once you have gathered all of the necessary tax documents, you must determine which tax forms you need to file.  If you are an individual with a few tax-deductible items, you can file a simple tax return. However, if you are self-employed you must also file a tax form called Schedule C.  If you have a lot of tax-deductible items, you will want to file a more complex tax return to itemize your tax deductions. If you are unsure what tax forms you need to file, you should contact a certified public accountant to assist you in your income tax return preparation.

Tax Day can be a stressful time, but it doesn’t have to be.  Gather all of your required tax documents as early as possible, and don’t put off the inevitable.  Contact a certified public accountant as soon as you can if you are unsure what tax forms you need to file, or what tax deductions you can take.  And, most importantly, don’t panic on tax day!

 

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

CONTACT US TODAY

Read more

All About UK Accountancy

UK accountancy is somewhat different from American accountancy, in that there are more regulatory standards for accounting in the UK than in America.  In America, companies must follow the Generally Accepted Accounting Principles (GAAP) set down by the Financial Accounting Standards Board. The UK uses the generally accepted accounting principles as a standard for accounting in UK companies.  However, there are other guidelines accountants in the UK must consider.

UK accountants must also consider the International Financial Reporting Standards (IFRS) set forth by the European Union (EU).  These international financial reporting standards were developed in an attempt to streamline the financial reports from UK companies as well as companies in other European nations.  This makes financial reporting easier to understand by everyone. The international financial reporting standards also allow UK businesses to more easily compare their financial statements to those of companies in other nations for the purpose of determining competition and industry standards.

In addition to the generally accepted accounting principles (GAAP) and the international financial reporting standards (IFRS), UK businesses must also adhere to UK law, such as the Companies Act 1985, as amended by the Companies Act 1989. These UK laws incorporate both the GAAP and the IFRS, as well as other European laws. The UK Companies Act 1985 also requires UK companies to file their accounts with the Registrar of Companies, which makes the financial reports available to the UK and worldwide public.

The Companies Act 1985 will soon be superseded by the Companies Act 2006, which is not yet in effect in the UK.  This UK Companies Act 2006 will restate in varying fashions the provisions laid down in the Companies Act 1985, and the amendments of the Companies Act 1989.  However, changes are being made to incorporate the European Union’s takeover of financial standards, and the laws regarding international trade and financial reporting that are now necessary for UK companies to follow.  It will also put into codified law the UK common law that was previously used in regards to UK companies and accountancy.

Any UK accountancy issues that require immediate attention but are not covered by the generally accepted accounting principles (GAAP), international financial reporting standards (IFRS), or Companies Act 1989 are brought before the Urgent Issues Task Force.  This group determines solutions to issues of UK accountancy, and publish Abstracts which are binding immediately for UK companies. These additional standards must also be followed by UK companies.

As you can see, accountancy in the UK is much more complex than that of the United States of America.  There are many UK laws, European Laws, and accounting standards to follow for UK companies. While Americans must only adhere to the generally accepted accounting principles (GAAP) set down by the Financial Accounting Standards Board (FASB), UK companies must adhere also to the International Financial Reporting Standards (IFRS) set down by the European Union.  If you have any question about standard accounting practices for UK companies, you should contact an accountant to help you with your UK accountancy as soon as possible

 

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

CONTACT US TODAY

Read more