Accounting Tips for Entrepreneurs

Most people hear the term entrepreneur and immediately envision a startup company in the tech industry or similar field The truth is that there are millions of entrepreneurs, many of whom are operating businesses in the gig industry. Whether an individual is a first-time business owner or a serial entrepreneur, there are some essential accounting tips they need to know.

Expenses

Create a budget. Cash flow is the life blood for an entrepreneur. Cash flow issues are the primary cause of business failure. It’s essential to keep careful watch over expenses. Use bookkeeping software to make the process easier.

Cash or Accrual

A cash-based accounting model records expenses and revenue when the money is paid. It’s good for small businesses, those that offer professional services, and businesses that don’t maintain an inventory. An accrual model records revenue when it’s earned instead of actually received. It’s a better solution for larger companies, those that are more complex in nature, and businesses that keep inventory.

Write-Offs and Deductions

Maintaining receipts ensures entrepreneurs receive all the write-offs and deductions to which they’re entitled on their taxes. That can include vendors, transportation, and monthly bills associated with operating the business. Be sure to categorize expenses.

Credit

Don’t rely too heavily on credit cards It’s easy to use credit as a means of supporting the business, but entrepreneurs can easily find themselves so far in debt they’re unable to even make minimum monthly payments on their card.

Predict the Future

Keep an eye on financial trends. A realistic financial forecast is essential to plan for future sales, expenses and income.

Separate Accounts

Never combine personal and business accounts. Its easier to monitor business health and prevents entrepreneurs from being responsible for business-related debts.

It’s the Law

Entrepreneurs need to know and understand the law regarding the type of business they have. Anyone in business for themselves will have tax responsibilities and expenses that hourly or salaried employees don’t. Hiring an accountant is a smart strategy. Individuals can benefit from an accountant’s experience, knowledge, and the professional can help keep a new business on track for success.

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Accountant
posted by Mark Battalini
June 30, 2023

Choosing the Right Accountant for Your Business

Choosing an accountant isn’t a task to be taken lightly. An online search can be helpful for accountants in your area, but you’ll have no point of reference. It can be helpful to seek referrals from family, friends and associates when seeking an accountant. You’ll want an expert that’s nearby, responsive, and available to answer any questions that may arise. The professional will play a vital role in your business and should be selected carefully.

Know Your Needs

A small business or one that’s newly established will have very different needs than that of a larger and more complex enterprise. It’s important that you take a good look at your business and understand the services you need before hiring an accountant.

You may need bookkeeping, payroll or tax preparation services. An accountant can provide all of that, keep you informed of financial trends, identify inconsistencies, and aid in maintaining cash flow. He or she can also assist in helping you create business strategies, investment opportunities for the future, and a business structure that best benefits you.

Certification

Only work with a certified public accountant (CPA) and one with experience in the same industry as yours. The professionals have the extensive training and expertise required to assist with bookkeeping, tax preparation and planning to help you attain your goals.

Ask Question

Narrow down your candidates and set up a meeting to talk with each one. Ask about their qualifications, services offered, and how much they charge. Determine what types of businesses they work with and how they can help your company grow and thrive. One of the primary questions should be their recommendations for saving your company money.

Take your time choosing an accountant. He or she may be an integral member of your business for many years to come. The right accountant for your business will be one of your greatest assets.

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Accountant
posted by Mark Battalini
May 31, 2023

Who Uses a Forensic Accountant?

Most people would be very surprised to learn the extensive variety of industries in which forensic accountants are employed. They analyze data and determine through irrefutable numerical facts if and where a crime has been committed. They work in multiple industries where individuals and criminal enterprises may be involved.

Forensic consultants are primarily employed in white collar crime cases to determine if a crime has been committed. They also perform routine forensic services to ensure the honestly of companies and organizations in multiple industries. The specialists produce numerical evidence and may be required to testify in court. A forensic accountant is a certified public accountant (CPA) that has earned credentials as a certified fraud examiner (CFE).

Financial Institutions

Banks, credit unions and community development lenders all use forensic accountants, along with brokerage firms and savings and loan associations. Government lenders also employ the specialists, including those that make loans to veterans, homebuyers and students.

Insurance Agencies

Insurers are a prime target for fraud, making the companies a natural environment for forensic accountants. The professionals are kept especially busy after a natural disaster, as they sort through the myriad of real vs fraudulent claims that are made.

Government Agencies

Forensic accountants are employed by local and state governmental entities. The professionals also work at the federal level, including the Federal Bureau of Investigation (FBI), Central Intelligence Agency (CIA), and Internal Revenue Service (IRS). They also work with the Bureau of Alcohol, Tobacco, Fire Arms and Explosives (ATF) and the U.S. Securities and Exchange Commission (SEC).

Law Enforcement

From the local to federal level, forensic accountants work in conjunction with law enforcement. They handle a variety of cases in which a crime involving money is concerned, such as murders when a huge insurance policy is at stake and bankruptcy court.

Companies and Security

Risk management and security service agencies employ forensic accountants to aid in preventing crimes such as embezzlement and to strengthen corporate policies. Forensic services are used in the credit card and utility industries.

Phone and Internet

Computer applications, phone fraud and telemarketer fraud are all within the investigative abilities of a forensic accountant.

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Accountant
posted by Mark Battalini
May 31, 2023

What is the Role of a Forensic Accountant?

There’s been much in the news about forensic procedures ranging from police work to voting machines. A lot of misconceptions surround forensics in the field of accounting. A forensic accountant is a certified public accountant (CPA) who looks for evidence of a crime.

Forensic accountants typically work for financial firms, insurance companies, government entities, a wide range of law enforcement agencies, and even consulting companies. CPAs earn certified fraud examiner (CFE) credentials to be a forensic accountant.

The professionals often collaborate with other investigative teams, primarily to identify where a crime has been committed. The legendary criminal, Al Capone, is an example of someone who was taken down for tax evasion by forensic accountants in conjunction with law enforcement.

Skills

A forensic accountant has advanced skills in data analysis and is knowledgeable in the many ways that fraud can be hidden. They’re also highly experienced with the myriad of schemes criminals use.

What They Do

Forensic accountants perform a variety of highly-regarded and valuable tasks. They trace and conduct research into where funds and assets are going – known colloquially as “follow the money.” They prepare in-depth reports of their findings and may testify in court about the data when required. They typically work on white collar crime cases that include the following areas.

Money laundering
Insurance fraud
Securities fraud
Credit card fraud
Bankruptcy fraud
Locating hidden assets
Computer applications
Telemarketing fraud
Legal system procedures
Misappropriation of assets
Violations of generally accepted accounting practices (GAAP) or generally accepted auditing standards (GAAS)

Opportunities

Fraud is a crime that never takes a vacation, with new schemes and variations occurring every day. It’s significantly increased the demand for forensic accountants and created new and expanding opportunities in the field. Fraud is a crime that individuals take great lengths to hide and for which forensic accountants are uniquely qualified to ferret out.

What is a Corporation?

The terms business, company and corporation are often used interchangeably by the general public. However, there are some significant differences and definite benefits.

Most Important Benefit

Corporations enjoy a variety of benefits and perks. The greatest benefit of all is limited liability. It means that stockholders can reap the benefits of profits through dividends and stocks, but they can’t be held personally liable for the company’s debts or a product problem. The only real risk to stockholders is losing the money they invested in the corporation.

What it Is

A corporation is a legal entity that’s often referred to as a “legal person.” It’s completely distinct and separate from the founders or owners. The Supreme Court ruled in 1886 that corporations were entitled to many of the same rights and responsibilities as an individual under the Fourteenth Amendment. Corporations can:

Pay taxes
Sue and be sued
Own assets
Enter into contracts
Loan and borrow money
Hire employees

Anyone Can Form One

Individuals or a group of people with a shared goal can form a corporation. To be recognized as a legal entity, it must be incorporated. Most corporations are for the purpose of making a profit, but there are also profit and non-profit organizations, along with charities that operate as legal corporations.

A corporation can conduct business under its own name, but it can also conduct business under a completely different name or have subsidiaries with other names that are owned by the parent company.

The Definition Varies

Corporations are created under the laws of the state in which they’re formed, but the exact definition of a corporation can vary among jurisdictions. The founders must file articles of incorporation and issue stock. Stockholders must also elect a board of directors during an annual meeting. The Securities and Exchange Commission (SEC) and federal law regulate public corporations.

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Accountant
posted by Mark Battalini
May 31, 2023

Accountant or Accountant Software?

It’s understandable that people want to save money, whether it’s on individual federal taxes or when keeping records for a business throughout the year. Many individuals are seriously debating whether to purchase professional accountant-level software or to hire an accountant. There’s really no comparison – hire an accountant.

Tax Accountant

Hiring an accountant minimizes the potential for an error and significantly reduces the danger of getting audited. Those with highly complicated tax situations involving stocks, bonds, investment income, dividends, and even cybercurrency are best served by an accountant. Professional accountants have worked with industry-grade software for years and even decades. They know exactly how and where to enter figures, and are familiar with all the terms used.

Tax accounts are highly trained professionals. They’re knowledgeable about all aspects of tax law, have the benefit of experience, and continuing education. They can provide advice about investments, credits, deductions, and tax planning to lower an individual’s tax burden, while helping clients to more effectively manage their finances. Accountants are available throughout the year to offer advice and answer any questions clients might have as they arise.

Tax Software

Many individuals believe that if they have accounting software like professional accountants use, their problems are over. Accounting software like the experts work with varies widely in cost. Some have a one-time cost per user of up to $999 per year. That’s just for the software. It doesn’t include licensing fees.

There’s also a steep learning curve for a non-accountant. Professional accounting software is highly sophisticated, with terms and abbreviations with which the average individual won’t immediately be cognizant.

Individuals trying to use accountant software can easily find themselves in the 4 percent of taxpayers that are audited. The risk of an audit is elevated if an individual has income exceeding $200,000 per year, is a sole proprietor of a business, or has foreign assets. Non-accountants trying to use professional accounting software are increasing their risk of an audit.

0 comments
Accountant
posted by Mark Battalini
April 27, 2023

Tips on Effective Debt Management for Consumers

April is National Financial Literacy Capability Month and a good time for consumers to educate
themselves about how to manage their debt. There are strategies anyone can use to pay down
debt, without considering a consolidation loan.
Stop Spending
The first step is to stop additional spending. It’s only adding to your debt problem. Take a hard
look at where your money is going. Eliminate non-essential expenses and look for other ways to
save, such as cheaper phone plans, stop eating out, and forego costly morning coffee.
Budgeting
Compile a list of what you make each month and a list of all your debt. Add up the minimum
payments. It can be helpful to divide the debt total by the 4 weeks of the month and keep an
equal amount out of each paycheck.
Credit Cards
Pay down the smallest credit card balance first. When that one is paid off, take the money you
were paying on the small balance and add it to the payment on the next smallest balance. It can
be helpful to switch a balance from a high interest card to one with a lower interest rate.
Call Creditors
Call the people you owe money to – explain that you’re having trouble paying what you owe
and why. Ask if there’s a way your payments can be reduced or if they have an available
payment plan. Some companies are willing to work with you.
Collection Calls
If you receive a call from a debt recovery company, make sure its legitimate. There are
numerous scams operating and the debt may not even be yours. Mistakes do happen.
Never make an immediate “first” payment over the phone. Ask what creditor the agency is
representing. Never make payments unless you know the creditor for which the collection
agency is working. Call the creditor to see if they’ve sent the debt to collections.
Keep a Log
Keep a log of the collection agencies that call, the date, time, and name of the person you
talked to. It's illegal for collection agency representatives to intimidate, threaten or use bad
language. Send a request via certified mail with return receipt requested, indicating they should
stop. If the agency continues to call, report it to the Federal Trade Commission.

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Tax, Tax Preparation
posted by Mark Battalini
April 27, 2023

A Personal Checklist for Tax Day

Tax day is a highly stressful event for many people, prompting them to procrastinate as long as
possible. Waiting to file yearly taxes can result in mistakes, missed deadlines and financial
penalties. Armed with a personal checklist, individuals will have the documentation they need,
filing will be easier, and tax day will be far less stressful.
Keep a Folder
Create a physical folder and place all documentation inside as the information arrives. Many
individuals use home accounting software and print-outs of pertinent information can make
filling out tax forms much easier.
Personal Information
The IRS wants very specific information about individuals. To fulfill those requirements, the
following information is required if applicable.
 Social Security numbers and birthdates for all filers and dependents
 Statement of earnings from all employment
 Social Security received
 Pension income received
 Earning information from side hustles or the gig economy
 Unemployment benefits
 Investment income
 State and local refunds
 Alimony paid or received
 Business or farming income
 Property taxes paid
 Home office expenses
 Any miscellaneous income from sources such as gambling
Adjustments
There are several ways to reduce tax liability and the amount owed. Some of those include:
 Student loan interest
 Education expenses
 Health Savings Account
 IRA contributions
 Self-employment health insurance expenses
Credits
Tax credits also help people lower their tax burden. Individuals will need documentation of:

 Child care expenses
 Adoption costs
 Home mortgage interest paid
 Charitable donations
 Insurance reimbursements
 Work expenses such as uniforms and union dues
 Medical-related expenses
 Energy credits
Taxes Already Paid
These can include personal property taxes, real estate taxes, and fees for vehicle licensing,
along with state and local taxes.
Miscellaneous Information
Individuals will need information about their bank accounts – both foreign and domestic – and
bank routing numbers. The IRS will need to know what account from which to deduct any taxes
owed or to deposit a refund.

0 comments
Accounting
posted by Mark Battalini
April 27, 2023

12 Common Accounting Terms Explained

Accounting professionals use a variety of terms and acronyms that are common within the
industry. However, those terms may sound like a foreign language or a magical incantation to
those that aren’t familiar with them. Typically applied to businesses, they can also be relevant
in relation to individuals.
Accounts Receivable
Often abbreviated as AR, it’s the money that customers owe a business for products or services
that have been provided/delivered.
Accounts Payable
Abbreviated as AP, it’s the money a company or business owes their suppliers and vendors for
goods or services.
Assets
An asset is anything that has current or future monetary value, such as rental property, patents,
vehicles, and equipment.
Balance Sheet
It’s a financial report providing a summary of what a company owns, owes, and shareholder
equity.
Capital
Known as CAP, it represents the value of an asset such as goods or cash.
Cash Flow
CF is the revenue and anticipated expense a business expects to generate.
Equity
Referred to as QE, in its simplest form, equity is what a company has when debts (liabilities) are
subtracted from assets.
Liability
There are both long-term and short-term liabilities. A short-term liability (STL) is money owed
within a year. Long-term liabilities (LTL) are money owed over multiple years.
Limited Liability Company
LLCs have a business structure in which owners/members can’t be sued for debts or liabilities
the company incurs.

Net Income
Net income (NI) is also known as net profit. It’s the money a company makes after subtracting
all expenses from all income generated.
Return on Investment
ROI is the amount of financial gain/profit that’s expected to be made compared to the price
that was paid (invested).
IRA
An IRA or Roth IRA are retirement savings accounts. Individuals can divert pre-tax money to an
IRA and the funds aren’t taxed until they’re withdrawn. A Roth IRA isn’t tax deductible, but
funds aren’t taxed when withdrawn.

What are the Best Accounting Practices to Use for an Online Business?

Low overhead costs, greater scalability, and the ability to work from anywhere desired makes
an online business appealing. However, online business owners are subject to the same
requirements as brick-and-mortar stores.
Hire an Accountant
Many people are good at operating a business, but lack money management skills. Meeting tax
deadlines and having up-to-the-minute financial details are just some of the benefits of hiring
an accountant. The professionals have experience, strategies and highly specialized software.
They provide multiple financial services, relieve stress on owners, and enables individuals to
focus on operating their business.
Budgeting
A realistic budget is an integral part of operating any business endeavor. Doing so will tell
owners if they’re overspending, if collections are slow, and allows individuals to make
adjustments as needed.
Business Software
For those determined to take care of the financial aspects themselves, there are business
accounting software programs that can be used. However, they don’t have the specialization of
those utilized by accountants.
Entering Data
It’s critical to enter receipts, invoices and all transactions immediately to ensure accuracy. It’s
necessary to track income and expenses for tax purposes. It provides a record of business
health. Payroll will also need to be addressed if the business has employees.
Taxes
Business owners need an excellent grasp of their tax obligations and filing deadlines. There are
self-employment taxes and other expenses for which business owners are liable and for which
they must plan.
Financial Changes
Tax laws change quickly and they can adversely affect any business owner that doesn’t see
them coming. Staying informed of those changes will help individuals protect their enterprise.
Business owners must stay informed of issues affecting their industry.
Follow the Financials

Go over financial statements monthly to understand the financial state of the business. Those
statements will indicate areas where the company is doing well and where improvement is
needed.

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