How to Become an Accountant? Education is Key

Although some people find employment in entry-level accounting positions (such as bookkeeper or clerk) without earning a diploma, most accounting professionals hold at least a four-year bachelor’s degree. Some choose to pursue more education and go on to become certified public accountants.

If you’re just starting out your school journey—or returning after an absence—you’re in the right place. Here are the accounting education options to get you started on the path to success in the field:

AA

Associate’s Degree

Available online or in a traditional classroom, this degree provides a solid grounding in the fundamentals of accounting and accounting technology. It can pave the way to an entry-level position with an organization’s finance and administration team, such as billing clerk, accounts receivable clerk or staff bookkeeper.

Time commitment: one to two years

BS

Bachelor’s Degree

Almost all staff accounting positions require a bachelor’s degree, which is available online, in a traditional classroom, or some combination of the two. Specific courses will depend on the school you choose, but expect to study the principles of accounting, business communications, accounting technology, business law and more.

Time commitment: up to four years, depending on your previous college credits

M

Master’s in Accounting

After a few years in the field, you might decide to move up the accounting ranks into a more challenging role. The master’s in accounting degree opens the door to management-level jobs in a huge variety of industries, from banking to construction to high tech.

Time commitment: one to two years

CPA

Getting Certified: CPA

Are your long-term sights set on becoming a Certified Public Accountant (CPA)? After earning 150 credit hours in a master’s degree program, you’ll be eligible in most states to sit for the rigorous CPA exam. Then you’ll need to work under the supervision of a licensed CPA to prove your stuff. Once you’ve successfully met these challenges, the path to senior accounting roles is open.

Online Accounting Degrees

Already juggling a busy life full of work and family commitments? Consider online accounting classes, designed with working adults in mind. The online option is:

• Flexible – Many online schools have year-round, rolling start dates. No more waiting around for spring semester to start!
• Efficient – With short classes, weekly homework deadlines and no need to commute, you can adjust your study schedule to accommodate family and work obligations.
• Mobile – Thanks to mobile apps and interfaces, you can access online classes just about anywhere there’s an Internet connection.
• Affordable – The online option might save you money. There’s no need to relocate, and the tuition cost can be lower than on-campus programs.

How Business Accounting Works

People are starting their own businesses every day. If you’re thinking about joining them, you probably have a vision of what you want that business to be. What may excite you about your business is the product or service you have to offer, the success that you imagine, and the freedom of lifestyle that you are sure will come — in time. What may bore or even frighten you is the plethora of numbers you have to wrestle with. You will be asked business questions that may elicit a blank stare as your response. Cash accounting? Accrual basis? Profit and loss statement? Projections? Huh?

Whether you want to create fine oil paintings or sell pork bellies on the street, your business will require some form of accounting. That term alone can cast a glaze over the brightest eyes, but in this article, we’ll show you that accounting is a process larger than crunching your numbers. It is a tool that will help you “account for” what your business has done, is doing, and hopes to do in the future. Accounting can be a bit like painting a picture, and a little like solving a puzzle. Despite its bad press, it can actually be fun.

Keys to Success

The first step to making accounting fun is to get a grip on the terminology. If your heart skips a beat when someone asks about your balance sheet, you can calm yourself by learning exactly what a balance sheet is and how it can help you. We’ve added a glossary of accounting terms at the end of this article to get you over the hump.

Second, realize that accounting is more than numbers. It includes databases of your customers, your vendors, and your employees, if you have them. The information you keep on these people and companies will help you track your business and plan your future. With proper accounting, you might discover that people in the Florida Keys buy barrels of pork bellies in February. You can legitimately plan a sales trip for the entire month. See? This is getting interesting.

Third, the key to successful accounting is in the establishment of your accounting system and the reliable input of data. You will set up a system that is uniquely yours. Recording the transactions and information is called bookkeeping, and it must be done regularly. You won’t get a good picture of your company if the paint (data) is stored in boxes in the basement. There is nothing harder than the task of going back to find and key in reams of old information. When you do, you stand a good chance of getting something wrong.

How Can Accounting Help Your Business?

Accounting doesn’t just make life easier at tax time and give you a better idea of how your business is doing financially. Accurate accounting can also make you more attractive to clients. Here are some common ways proper accounting can help make your business more valuable for your clients:

1. FINANCIAL STABILITY

When your business finances are in order, you have an accurate view of how much money is coming and going. You can also create more accurate forecasts for future revenue and expenses, so you can make sure you have enough cash reserves to float you through any tough times.

With stable business finances, you can offer your clients a consistent, positive experience. You won’t need to cut costs unexpectedly because money is tight, so you won’t suddenly cut down on employees or take on so much new business that the quality of your work suffers.

2. GREATER EFFICIENCY

Proper accounting offers you up-to-date financial data about your business. And that can help you make crucial decisions about the need for, and timing of, new business investments. Could new equipment make you work faster? Could it mean you deliver better service to your clients?

Accurate financial data helps you decide whether it’s the right time to invest more cash in your company and how those expenses will affect your cash flow.

3. SMARTER MARKETING

Financial records offer you insights into your expenses and cash flow, which in turn can help you make better decisions about marketing your business.

Accurate accounting information can help you decide the right time to launch a marketing campaign and understand whether your marketing efforts are delivering the results you want.

What Are the Basics of Small Business Accounting?

Now that you’ve got a handle on how accounting can help your business, you’re ready to dive into the basic principles of small business accounting. There are three main areas of effective small business accounting:

1. MASTER BASIC BOOKKEEPING

Don’t let the name intimidate you: bookkeeping just refers to keeping track of your business transactions, from revenues to payments. One of your main business goals is probably to make money, and to do that, you’ll need to know how your income compares to your costs. Proper bookkeeping can help by:

• Letting you know if you’re making a profit, or if you’re on track to do so
• Telling you whether you’re in danger of running out of money
• Simplifying tax season by recording information you’ll need to file taxes

2. FILE YOUR BUSINESS TAX RETURNS

Tax season can be a stressful time for freelancers and small business owners, and for good reason: filing taxes becomes more complicated when you’re self-employed. But with proper accounting throughout the year, you can lessen tax-time headaches.

There are different types of business taxes and they vary by industry and by state, but some of the most common include:

• Income Tax: Which requires you to pay a portion of your income to the government.
• Sales Tax: Depending on the type of work you do for clients, you might add sales tax to your invoices that you later pay back to the government.
• Employee Taxes: If your company has staff, you’ll collect taxes from your employees’ paychecks and pass that on to the government.

For a full rundown of filing taxes as a freelancer, check out the FreshBooks blog.

3. CREATE FINANCIAL REPORTS

Accounting reports can help guide important business decisions. You probably face tough choices often—whether to buy pricey equipment for your business, what specific services to offer clients or whether to hire contractors to help with your workload.

There are a number of accounting reports that can help you make these decisions. Some of the most common reports include:

• Cash Flow Statement: Shows you all your financial activities, from the money flowing into your business (earnings from clients) to the expenses moving out (for rent, utilities, staff and more). Clearly, this is an important report to get right

• Profit and Loss Report: Shows your total income and your total expenses for a specific time period. It’s not quite as detailed as your cash flow statement, but it offers a helpful overview of where your business stands financially.

• Balance Sheet: Shows what your company owns versus what it owes for a specific time period. In other words, it gives a snapshot of your financial position at any point in time.

Ways to Help Your Accounting Staff Be More Successful

There is a multitude of ways in which you can help your accounting staff become more productive and reach their personal career goals. Here are just a few…

* Praise employees in front of their peers – Everyone loves a compliment, but there is something about honoring someone publicly that encourages him or her like no other. When praising employees in public, be specific about what they have done right. Remember that the actions you acknowledge and encourage will be perpetuated.

* Train accountants with microlearning – It’s nearly impossible for an accountant to be successful apart from ongoing training. Most accounting firm managers know this and do provide training in some form. What training model does your firm utilize? Whether your training program is traditional (in-person), online, or blended, make use of microlearning. Microlearning allows people to digest bite-sized pieces of knowledge in short periods of time, often via a mobile device. This type of learning can be more fun than lengthy training sessions. It also increases learning retention.

* Choose the right accountants for your firm – If you want your workforce to be successful, hire the right accountants right off the bat. In the article How to Help Your Employees Succeed, Dr. John B. Charney wrote, “Leadership is about more than overseeing a team of people…it is about selecting the right people in the first place and then constantly ensuring everybody on that team is working to the very best of their ability. Make sure all your people are in the right position within the firm.” Hiring the correct employees and placing everyone where they are most effective takes time and practice, but it is key to your accountants’ and firm’s success.

What are the three basic strategies to use in planning for taxes?

Tax planning or tax-effective investing is a way of structuring your finances to reduce your tax liability and make some savings on tax. Tax planning can benefit both individuals and companies when it is carried out within the confines of the stipulated tax law. There are three basic ways you can plan your finances to minimise your tax burden; read on to discover these ways:

Taxable Income (ATI).

One of the critical elements used to determine the amount you owe in tax is your Adjusted Taxable Income (ATI). Various tax credits and tax rates are usually dependent on your ATI. Even mortgage lenders and banks will often ask for an individual’s ATI before making any lending commitment with them—hence, the importance of Adjusted Taxable Income.

Given the importance of the ATI, your tax planning should probably start by defining your ATI. Your Adjustable Taxable Income is the calculation of all your income minus the adjustments you can make to your income. For instance, if you pay for a retirement plan, then this subsequently reduces your wages, thus lowering your taxable income: This means you can reduce or deduct your retirement plan payments from your overall income.  Other adjustments you can make on your taxable income include superannuation contributions, child support payments and spousal maintenance payments.

Increase your tax deductions

Another tax planning strategy is to take advantage of tax deductions. Once you have calculated your ATI (having made the necessary tax adjustments), you will be left with taxable income. You can now make a standard deduction or an itemized deduction on your taxable income. For instance, you can deduct the expenses used for health care, mortgage interest and state taxes.

If you want to utilize deductions fully, you should consider making an itemised list of all your annual expenses in a spreadsheet. This will help you compare your standard deduction versus your itemised expense deduction. Two of the biggest tax deductions you can take advantage of are on state taxes and mortgage interest.

Utilize Tax Credits

Taking advantage of tax credits and tax incentives can reduce your tax. For instance, you might be eligible for a tax credit if you pay medical expenses relating to disability aids or aged care. You can also get tax credits for child care benefits and spouse maintenance.

Tax planning can be difficult to comprehend, especially if you have little financial knowledge. It is, therefore, wise to seek the services of a reputable tax accountant to help you safely implement the above mentioned tax-effective investing strategies.

Tax Planning for Beginners: Tax Strategy Concepts to Know

Tax planning is the analysis and arrangement of a person’s financial situation in order to maximize tax breaks and minimize tax liabilities in a legal and efficient manner.

Tax rules can be complicated, but taking some time to know and use them for your benefit can change how much you end up paying (or getting back) in April. Here are some key tax planning and tax strategy concepts to understand before you make your next money move.

Tax planning starts with understanding your tax bracket

You can’t really plan for the future if you don’t know where you are today. So the first tax planning tip is get a grip on what federal tax bracket you’re in.

The United States has a progressive tax system. That means people with higher taxable incomes are subject to higher tax rates, while people with lower taxable incomes are subject to lower tax rates. There are seven federal income tax brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%.

No matter which bracket you’re in, you probably won’t pay that rate on your entire income. There are two reasons:

You get to subtract tax deductions to determine your taxable income (that’s why your taxable income usually isn’t the same as your salary or total income).

You don’t just multiply your tax bracket by your taxable income. Instead, the government divides your taxable income into chunks and then taxes each chunk at the corresponding rate.

For example, let’s say you’re a single filer with $32,000 in taxable income. That puts you in the 12% tax bracket in 2020. But do you pay 12% on all $32,000? No. Actually, you pay only 10% on the first $9,875; you pay 12% on the rest. If you had $50,000 of taxable income, you’d pay 10% on that first $9,875 and 12% on the chunk of income between $9,876 and $40,125. And then you’d pay 22% on the rest, because some of your $50,000 of taxable income falls into the 22% tax bracket.

The difference between tax deductions and tax credits

Tax deductions and tax credits may be the best part of preparing your tax return. Both reduce your tax bill, but in very different ways. Knowing the difference can create some very effective tax strategies that reduce your tax bill.

Tax deductions are specific expenses you’ve incurred that you can subtract from your taxable income. They reduce how much of your income is subject to taxes.

Tax credits are even better — they give you a dollar-for-dollar reduction in your tax bill. A tax credit valued at $1,000, for instance, lowers your tax bill by $1,000.

Taking the standard deduction vs. itemizing

Deciding whether to itemize or take the standard deduction is a big part of tax planning, because the choice can make a huge difference in your tax bill.

What is the standard deduction?

Basically, it’s a flat-dollar, no-questions-asked tax deduction. Taking the standard deduction makes tax prep go a lot faster, which is probably a big reason why many taxpayers do it instead of itemizing.

Congress sets the amount of the standard deduction, and it’s typically adjusted every year for inflation. The standard deduction that you qualify for depends on your filing status, as the table below shows.

What does ‘itemize’ mean?

Instead of taking the standard deduction, you can itemize your tax return, which means taking all the individual tax deductions that you qualify for, one by one.

• Generally, people itemize if their itemized deductions add up to more than the standard deduction. A key part of their tax planning is to track their deductions through the year.

• The drawback to itemizing is that it takes longer to do your taxes, and you have to be able to prove you qualified for your deductions.

• You use IRS Schedule A to claim your itemized deductions.

• Some tax strategies may make itemizing especially attractive. If you own a home, for example, your itemized deductions for mortgage interest and property taxes may easily add up to more than the standard deduction. That could save you money.

• You might be able to itemize on your state tax return even if you take the standard deduction on your federal return.

• The good news: Tax software or a good tax advisor can help you figure out which deductions you’re eligible for and whether they add up to more than the standard deduction.

Minimize or eliminate the new 3.8% Medicare tax on personal investment income.

You can do this by reducing rent charged to the business for a personally-owned building and equipment, increasing retirement plan and IRA contributions, gifting investment assets to lower bracket family members or charity, investing in tax-free bonds, and reducing capital gains through tax-free exchanges and harvesting capital losses.

Know your options for maximizing retirement plan contributions.

Looking to maximize tax-deductible retirement plan contributions. Entrepreneurs over age 40 with a younger staff can now fund a combined “safe harbor” 40l(k) profit sharing plan (with a 6% match) and cash balance defined benefit pension plan to save thousands in federal and state income taxes with contribution limits of more than $113,000 annually. How about slightly smaller tax-deductible contributions? Entrepreneurs over age 40 with a younger staff should consider a 40l(k) cross-tested profit sharing plan.

Optimize the way your business is structured.

Contact us to determine the payroll tax savings available from electing Subchapter S corporation status. Often business owners will be able to significantly reduce payroll taxes by taking a lower salary, with the remaining profit distributed as a dividend (not subject to payroll taxes). S status can also reduce income and payroll taxes on the sale of your practice, and lower IRS audit risk and exposure. Look for future article explaining entity selection in more detail!

Things to Consider When Choosing a Payroll Provider

Choosing a payroll provider is a crucial aspect for businesses of all sizes. It involves calculating employees’ salaries and tax deductions, liaising with HMRC, and most importantly, ensuring employees are paid on time. However, it can be a headache, and with increased obligations and regulations, payroll is now a specialist occupation in its own right. Organisations must have the correct staff with relevant skillsets, as well as the tools and software to ensure the whole process runs smoothly to minimise financial risks and penalties.

Service

Outsourcing a payroll provider can be a daunting prospect, this can make it easy to jump straight into it and settle on any provider without finding out exactly what services they have to offer. Many payroll providers nowadays offer an extended range of services that go beyond simple payroll. It may also be the case that one business requires a specific service or skillset that some providers do not offer. Every organisation is different, meaning that the services they require from a provider will be unique and depend on various factors such as company size, regularity of payroll and the industry type. Establishing what services your business needs and services a provider can offer is the first crucial step.

Accreditations

Accreditations that a provider has can often offer businesses peace of mind, as they can signify that a provider is trustworthy and has been deemed competent by a chartered body. The Payroll Assurance Scheme (PAS) accreditation, for example, recognises payroll providers who: have suitable processes in place for preparing and delivering legislative changes, the organisation is dedicated to life-long learning and development, and the organisation is dedicated to compliance and best practice in payroll.

Security

With the introduction of the General Data Protection Regulation (GDPR) last year, data security has never been more of a priority for businesses, not only for protecting customer data but employee data too. Businesses must consider how payroll providers will manage the privacy and security of employee data, as they could land themselves in a lot of trouble in the event of a security breach. In 2014, Supermarket chain, Morrisons, found themselves in a security breach disaster after an employee leaked the payroll data of almost 100,000 staff. Aside from causing utmost distress for the employees whose data was leaked, Morrisons were held liable for the security breach.

Experience

Most businesses look for payroll providers who have experience, particularly within their company’s sector. As with accreditations, experience can also offer peace of mind. An experienced payroll provider will be able to take care of all the business’ requirements and can adapt to fit the needs of the business if required. Experience may be determined by the number of accreditations a provider has, or quite simply by the number of years they have been providing payroll services. Thankfully, outsourcing a payroll provider should mean that you are choosing from a specific talent pool, who will have years of experience behind them. At Cantium, we are proud to have over 30 years’ experience delivering successful payroll functions to clients in a variety of industries such as health and education to name a new

Things to Consider When Choosing a Payroll Service for Your Small Business

If you’ve been handed the task of choosing a payroll service provider for your company, you may be wondering where to start and what to look for. If you get a headache thinking about the hundreds of regulatory changes that occur every year, you’re not alone. Outsourcing your payroll can save you time and money, not to mention a headache or two.

Experience

An experienced payroll provider will be able to cover all of your business’ needs, including web-based and traditional payroll processing, time and attendance solutions, employee screening and background checks. A good payroll service will work with your business to fit your exact needs. Additionally, check to see if the payroll provider has worked with a business in your industry before. This will help you be confident that the company you choose is ready for the specific challenges of your industry.

Options and Features

Ensure that the provider uses software that’s capable of delivering all of the services you desire. Find out what basic features the software offers as well as additional features that are available. As a small business, you may not need as many options as a larger business, but it’s still important to know what’s available. To streamline payroll and employee time tracking, you need a payroll provider that can ensure accuracies and quickly remedy discrepancies.

Trust and Security

When you hire a payroll provider, make sure you hire someone you trust with the sensitive data involved in handling payroll and taxes. Look for an established payroll company with a strong history, client testimonials and a solid reputation. Do your research online before making a commitment. Read reviews online and ask for recommendations within the business community. It’s common for businesses to give referrals, especially if they’ve had a great experience with their payroll providers.

Customer Service

You’ll want to communicate regularly with your payroll provider. Look for a provider that offers strong customer service. When you’re having a problem, you’re going to want to talk with someone who has a real understanding of your business and its challenges, not a random sales representative. Make sure the payroll provider you choose offers support each day – not only on specified days, such as when your payroll is processed. Realistically, you’re going to have questions on other days that will need immediate attention from a customer service representative.

How to safely choose the absolute best payroll service for you and your employees

Payroll service companies can be a big help when it comes to calculating and filing your company’s payroll taxes, printing checks, and being available to answer important payroll-related questions. Industry-leading companies have streamlined processes and controls that lead to greater efficiency and fewer errors, which can save your company time and money.

When considering payroll service options, it is important to choose a reputable company because ultimately your business is responsible for paying the taxes, not your payroll company. That means you must do your homework to ensure the payroll company is compliant with regulatory standards and that your taxes are paid in full and on time.

Choosing a payroll company

One of the best ways to find potential payroll service providers is to ask other business owners or payroll professionals who they recommend and why. Hearing directly from a company’s customers is a great way to evaluate the company’s processes and service levels.

You can also look up reviews of companies with the Better Business Bureau. Search for “payroll service” or a company name, based on location, and the BBB will provide a grade and information such as how long the company has been in business, contact information, and consumer reviews.

Once you’re ready to start narrowing down your choices, ask these additional questions to determine if the company will be a good fit:

What services do you offer and what certifications do staff members hold? It’s important to know what you’re looking for from a payroll company and whether those needs go beyond the basics. The company should have a CPA on staff, and other professional certifications (like Society of Human Resource Management or American Payroll Association) are a good sign of a quality organization.

Is the company bonded and insured? Find out how much the company is insured for and request a certificate of insurance.

What security measures are in place to protect my payroll data? Companies should have antivirus and antimalware programs, firewalls, encrypted data, secure data storage with redundancy and employee training on data security. They also should perform background checks on all employees.

How often are internal controls audited and do you provide the results to customers? Payroll companies should perform audits at least annually, and they should provide a copy of their SSAE 16 report to customers if requested.

How do you remain up-to-date with regulatory requirements? A considerable number of federal, state, and local regulations affect your payroll processing, so it’s important to find a company that has an airtight process for staying up to date on all of the changes from thousands of jurisdictions.

How to Choose the Best Small Business Payroll Services

Your small business won’t perform up to its potential unless your team is happy. That’s why payroll services for small businesses are so important. If your team doesn’t get paid, on time, and conveniently, it’s going to cause issues with morale and productivity.

What to Look for in a Payroll Service

You know better than anyone exactly what your business needs. So let’s consider the factors that play into finding the perfect payroll services for your business

Pricing Structure and Total Cost

You probably already knew this, but the pricing of your payroll services is crucial. The total cost of a payroll service will depend on how many team members your business employees, what kind of employees they are, and the features that the payroll service offers.

Most payroll services will come with the pricing structure of a base monthly price, plus a per employee monthly price. Many payroll services will offer tiered services that cost more based on the additional services they offer. The additional cost will often surface in the per-employee monthly cost, so additional features will be incrementally more expensive with each employee you have.

Tax Capabilities and Guarantee

Payroll services exist in part to help small business owners pay their payroll taxes correctly and efficiently. Many small business owners purchase payroll services primarily for this reason. Some payroll services will offer a tax guarantee, which means that they guarantee that you won’t incur any fines, and if you do, they will reimburse you.

Tips for Finding the Best Payroll Software

Congratulations! You’ve gotten to a point that many other small business owners have only hoped for — growth. But now you’re required to find a more robust payroll system.

Sure, when it was you and a couple of co-founders it was pretty easy to sort out payment. But now that you’re growing, it’s necessary to put a process to your operations, offload some of the tedious work you’ve been doing since the beginning, and free up your time and resources to focus on bigger issues at hand.

One smart way to do this is to invest in a payroll software platform that can take care of one of the most important parts of your business for you: paying your employees on time, every time

Yet, as you know, it’s not nearly as easy as just cutting a check. From properly withholding taxes and reporting to the IRS to tracking PTO hours earned and much in between, there’s a lot to consider when deciding which payroll software system is right for you

How to choose the best payroll software for your small business

Overall, the best thing that you can do is get a solid understanding of your business’ unique individual needs. As you dive into the capabilities and features of the many payroll systems out there, it can be easy to get swept up in thinking that you need fancy features that will actually go unused or forget an important need you have until it’s too late. So, above all else, know what you need (and what you don’t) and compare everything to that.

tips for choosing the right bookkeeper

Organised, process driven and efficient

A good bookkeeper must understand your industry, your business processes and your requirements so they can hit the road running. They make sure processes are streamlined and adhered to in order to provide you with timely reporting and meet the timelines you require in your business.

Ethics and trust

This is paramount. Both parties need to feel comfortable with one another in order to build a relationship based on trust. It is important to provide all the correct information to your bookkeeper so they can keep accurate up to date records for you. It would make good business sense to protect yourself by having a confidentiality agreement in place.

Up-to-date technical knowledge

Up-to-date software knowledge is a must. Bookkeepers who are familiar in using online accounting software can automate many processes and reduce the amount of time spent on data entry.

Communication skills

This is essential to keep the lines of communication. Your bookkeeper must be aware of the business operations, goals and issues to do their job correctly. The ideal must have the ability to enhance relationships with managers, customers, suppliers and staff alike.

Ask questions

A great bookkeeper asks relevant questions. He or she will also share ideas with the business owner regarding financial-planning strategies, ways of increasing revenue, cash flow, budgeting and many other cost-saving strategies they can come up with to increase business performance and growth. With a good understanding of the business and financial position they can help grow the business while keeping costs to a minimum.

How to Choose the Right Bookkeeping Services

Whether you’re just starting your business or you’re fine-tuning your financial strategies, a professional bookkeeper can be a tremendous help when it comes to balancing your daily expenses, earnings and managing your invoices. By handing these jobs over to a specialist, you can lower your risk of error and instead use those extra hours for other pursuits. But where do you find a bookkeeper, and what do you need to know in order to choose? Read on to discover how successful businesses locate the best bookkeeping services.

Hiring Internally

While hiring an employee to take over bookkeeping may seem like a good way to keep control of your finances and the people managing them, this method often falls short in execution. For businesses without an expertise in managing bookkeeping procedures, accounting software or financial analysis, managing bookkeeping internally can be a recipe for disaster.

Hiring Freelancer or Part-Time Bookkeepers for Bookkeeping Tasks

What kind of education and experience does a freelancer have? The answer varies greatly from one worker to the next. You want to ensure your bookkeeper has professional education in the field, along with relevant experience and a good track record. Certification, licensing and insurance should all be investigated. If a freelancer makes a mistake while working for your business and doesn’t have liability protection, you’ll likely be left holding the bag. In addition, if your freelancer is working off-site, say from a home office, you’ll have to find a way to provide adequate oversight in order to prevent account mismanagement and serious mistakes.

Hiring CPAs

Hiring a CPA to do a bookkeeper’s job is usually a serious waste of resources. Not only that, but accountants rarely enjoy the work. Instead, consider hiring a CPA to advise you on financial matters requiring more expertise, like filing taxes or managing investment funds. CPAs regularly work with bookkeeping services, and may be able to recommend professionals who can fill a daily accounting role for your business at a much lower price.

Hiring Professional Bookkeeping Services

Finally, there are bookkeeping service companies that manage daily accounts for multiple businesses. They often employ CPAs for management roles to provide adequate oversight and counsel for a bookkeeper who runs into a problem. Because they work with a variety of clients, these services often have access to a wider range of tools, and because they employ so many people, they have a better chance of having the experience needed by your business. Additionally, leveraging connections to industry experts and accounting technology companies can provide extra benefits to businesses.

HOW TO CHOOSE THE RIGHT BOOKKEEPER FOR YOU

Finding the right bookkeeper to do your books can make a huge difference for your small business. A good bookkeeper can impact positively on the various financial aspects of your small business. These professionals have the ability to take care of all your financial obligations while you concentrate on doing other things that require your personal attention. The following are tips on how to choose the right bookkeeper for you.

Honesty and Trust:

When looking for the right bookkeeper, these two are most important things to consider when doing your search. A bookkeeper has the role of managing your finances with little input from you the business owner. Since this will be a total stranger handling your finances, it is important to hire an honest person, someone you can trust with your finances. To do this you need to thoroughly vet them before settling for one

Integration:

Most business owners are moving from the traditional ways of doing business to digital methods and systems. Therefore, when looking for a good bookkeeper, ensure that he or she has a wide knowledge of various bookkeeping software and keeps a keen eye on the different market trends

Fees and Services:

Although most business owners especially those with new business tend to hire a bookkeeper based on the price; how affordable is the bookkeeper, this should be avoided. You might get a bookkeeper offering his or her services at a cheaper price yet the services are poor and this will cost you dearly. Do not be afraid to ask questions, or even negotiate the fee. Ensure that you understand the services being offered and find the best fees and services that suit your needs. Do not compromise your financial security simply because of price.

Qualifications:

This is very important when hiring any professional. To ensure that your bookkeeper is knowledgeable, is an expert in bookkeeping, understands the different software used in bookkeeping and is professional, it is important to check his or her academic qualifications and certifications. Experience is also important. You do not want an inexperienced newbie handling your finances only to make blunders.

How to hire the right bookkeeper

Helping you with the numbers

As soon as you start a business, you have to deal with numbers. Every business, no matter how small, must keep a record of its every transaction. That includes sales, expenses, salary payments – in fact every movement of money into and out of your business.

Three reasons why you need a bookkeeper

If you’re just starting out in business, you might think you don’t need someone to look after the books. Perhaps you feel that it’s enough to let your accountant sort out the numbers once a quarter or once a year. But there are good reasons for hiring a bookkeeper

They save you time

Unless you already know a lot about bookkeeping, it’s unwise to take on this work yourself. Processing receipts, expenses and payments is only part of the work. They know how to assign expenses to particular clients. They’ll take all the numbers, enter them into your accounting software, and make sense of them. A good bookkeeper knows how transactions should be treated to provide useful business reports. It’s a skilled job, and your bookkeeper will do it much more efficiently than you can.

They understand your business

Because they deal with the day-to-day accounts, bookkeepers have a deep insight into your company’s finances. By sharing this insight with you, they can help you work out where your business should be going. They can flag any issues in time for you to do something about them. A good bookkeeper watches over your finances and helps you steer clear of trouble.

They help manage your cash flow

Accountants provide a valuable service, particularly when it comes to strategic advice, annual returns, and tax issues. But they don’t usually see your accounts every day. A good bookkeeper will keep a close eye on your accounts on a regular basis. This will help keep your cash flow under control, which is vital for business growth.

How to choose the best accounting software

Not having a good bookkeeping system in place – that would provide warning signs that the business could run out of cash – is one of the main reasons businesses fail

You can choose to set up a bookkeeping system manually (using accounting books), electronically (spreadsheets) or use accounting software. Unless you want to get familiar with bookkeeping practices, accounting software is the most efficient choice.

What to consider

Every business will have different requirements from an accounting software

When choosing an accounting software consider the following questions:

Does the system calculate all payroll requirements (PAYE, annual leave, long service leave etc.)?

Does the system track stock, work in progress, orders, jobs and other task management requirements?

Will the system be able to handle multiple bank accounts?

Does the system need to handle foreign currency?

Does the system track separate financial records for each business or department within the business?

Does the system allow for interface with other computer systems such as online payments?

Does the system keep detailed records on customers including what they buy, how often they buy and when they buy (often referred to as a Customer Relationship Manager system)?

Software options

There are many software packages on the market that allow business managers to successfully control records without an accounting degree. Some of them, such as Free Accounting Software External link (opens in same window), have no cost