Best Practices in Accounting for Your Online Business

When it comes to accounting for online businesses, there are several best practices that are unique to this type of business model. Here are some key considerations for effective accounting in online businesses:

Accurate tracking of online transactions

Online businesses often deal with a large volume of transactions, making it crucial to have a robust system for tracking and recording these transactions accurately. This may involve implementing e-commerce platforms, payment gateways, and accounting software that integrate seamlessly to capture and reconcile online sales, refunds, discounts, and shipping costs.

Proper classification of revenue and expenses

Online businesses can generate revenue from various sources such as product sales, subscription fees, advertising, and affiliate marketing. It is important to accurately classify and record these revenue streams to gain insights into the business's financial performance. Similarly, expenses related to online marketing, website maintenance, hosting, software subscriptions, and shipping costs should be properly categorized.

Inventory management and valuation

For online businesses that sell physical products, proper inventory management and valuation are critical. Implementing inventory management systems that integrate with accounting software helps track inventory levels, ensure accurate cost of goods sold (COGS) calculations, and minimize the risk of overselling or stockouts.

Sales tax compliance

Online businesses often operate in multiple jurisdictions, which can make sales tax compliance complex. Ensure you understand the sales tax requirements for each region where you have customers. Implementing automated tax calculation and reporting tools can help streamline the process and ensure compliance.

Financial data security

Online businesses deal with sensitive customer information and financial data. Implementing robust security measures to protect customer data and financial records is vital. This includes employing secure payment gateways, regularly updating software, implementing encryption protocols, and restricting access to financial systems.

Regular financial reporting and analysis

Online businesses tend to have real-time access to vast amounts of data. Regular financial reporting and analysis enable you to monitor key performance indicators (KPIs), track profitability, identify trends, and make informed business decisions. Consider generating financial reports and reviewing them frequently to gain insights into your online business's financial health.

Stay updated with regulatory changes

Online businesses are subject to various regulations, such as data protection laws, online privacy regulations, and tax regulations. Stay informed about changes in regulations that affect your business to ensure compliance and avoid legal issues.

Consideration of international transactions

If your online business operates globally and deals with multiple currencies, foreign exchange management becomes important. Understand the impact of currency fluctuations on your financial statements, and consider employing tools to manage currency risk and optimize exchange rates.

Online businesses offer tremendous opportunities for entrepreneurs to thrive in the digital realm. It's important to consult with a qualified accountant or financial professional who specializes in online businesses to ensure you are following the best practices specific to your industry and jurisdiction.

Need assistance in implementing any of these best practices? SIMPLY Financials PLUS can help. We work with businesses to set up best practice solutions utilizing QuickBooks and other available third-party applications. Contact us at simplyfinancialsplus.com/contact to learn more about what we can do for your online business.

Beyond Tax Season: Essential Financial Priorities for Small Business Success

As a small business owner, tax season often brings a flurry of activities and deadlines. However, once tax season is over, it's essential to shift your attention to other critical financial areas of your business.

This article will guide you through some essential financial aspects that deserve your focus now that tax season has concluded. By redirecting your efforts strategically, you can set the stage for long-term success and ensure your business thrives beyond tax obligations.

#1: Review and Analyze Financial Statements

After tax season, it's an ideal time to thoroughly review your financial statements, including your income statement, balance sheet, and cash flow statement. Analyzing these documents will provide insights into your business's financial health, profitability, and cash flow patterns. Identify areas of strength and weakness, and use this information to make informed decisions moving forward.

#2: Budget Assessment and Planning

Assessing and updating your budget is crucial to maintain financial stability and plan for future growth. Review your expenses, identify cost-saving opportunities, and evaluate whether your revenue projections align with your business goals. Adjust your budget accordingly, setting realistic targets and allocating resources strategically. A well-structured budget can help you manage cash flow effectively, control costs, and make informed investment decisions.

#3: Strengthening Financial Controls

Take the opportunity post-tax season to strengthen your financial controls. Ensure that appropriate checks and balances are in place to minimize the risk of fraud and errors. Review your internal control procedures, such as segregation of duties, inventory management, and approval processes, to safeguard your business's financial assets. Implement regular audits to identify any areas that need improvement, enhancing the overall integrity of your financial operations.

#4: Business Insurance Evaluation

Insurance coverage plays a vital role in protecting your small business from unexpected events or liabilities. Use this time to review your existing insurance policies, such as general liability, property, professional liability, or cyber insurance. Assess whether your coverage is adequate and matches your current business needs. Consult with an insurance professional to ensure you have the right coverage and understand any updates or changes required to mitigate potential risks effectively.

#5: Debt Management and Financing

Evaluate your business's debt structure and explore ways to optimize it. If you have outstanding loans or credit lines, review the interest rates, repayment terms, and consider refinancing options that may help lower your overall interest costs. Additionally, assess your financing needs for future growth and expansion plans. Explore potential funding sources, such as small business loans, grants, or alternative financing options, to support your business's long-term goals.

#6: Financial Education and Professional Guidance

Invest in your financial knowledge and seek professional guidance to ensure you stay well-informed and make sound financial decisions. Attend workshops, webinars, or seminars to expand your understanding of financial management, tax strategies, or industry-specific regulations. Consult with an accountant, financial advisor, or business mentor to receive personalized advice tailored to your unique business circumstances. Their expertise can help you optimize your financial operations and drive sustainable growth.

With tax season behind you, it's time to shift your focus to other vital financial aspects of your small business. Embrace this opportunity to refine your financial strategies, make informed decisions, and set the stage for long-term success. Remember, a strong financial foundation is crucial for navigating the ever-changing business landscape and achieving your entrepreneurial goals.

If you find that you need assistance in implementing any of these strategies, SIMPLY Financials PLUS can help. We work with businesses to set up best practice solutions utilizing QuickBooks and other available third party applications.

Contact us at simplyfinancialsplus.com/contact to learn more about what we can do for your business.

The Perils of Mixing Personal and Business Expenses: Why It's Bad for Your Business Accounting

As a business owner, it's tempting to use your personal credit card or bank account for business expenses or vice versa. After all, it may seem easier to keep track of just one account, and you may think it's not a big deal since you're the one who owns the business.

However, mixing personal and business expenses can quickly become a financial nightmare that makes your accounting more difficult and less accurate. Here are some compelling reasons why it's not a good idea to mix the two:

#1) Lack of Accuracy in Financial Reporting

Accurate financial reporting is crucial for managing your business effectively. Mixing personal and business expenses can create confusion and make it challenging to determine which expenses are personal and which ones are business-related. This can lead to inaccurate financial statements, which can impact decision-making and hinder the growth of your business.

For instance, if you're using your personal credit card for both personal and business expenses, it can be cumbersome to separate and categorize each expense correctly. You might miss important tax deductions or overstate your business expenses, which can lead to incorrect financial statements and tax filings. This can result in penalties, fines, and increased scrutiny from tax authorities, putting your business at risk.

#2) Difficulty in Tracking Business Expenses

Mixing personal and business expenses can also make it challenging to track and manage your business expenses effectively. Separating and organizing expenses becomes time-consuming, especially as your business grows. It becomes harder to identify which expenses are essential for tax purposes, reimbursement, or record-keeping.

For instance, if you're using your business account for personal expenses, it can be challenging to identify legitimate business expenses for tax deductions or reimbursements. You may inadvertently claim personal expenses as business expenses, leading to tax discrepancies and legal issues. Additionally, if you're using your personal account for business expenses, it can be challenging to track your business' cash flow, profit margins, and other financial metrics accurately.

#3) Legal and Liability Risks

Mixing personal and business expenses can also expose you to legal and liability risks. When you commingle personal and business funds, it can blur the legal distinction between you as an individual and your business entity. This can result in the loss of limited liability protection, which is a fundamental benefit of operating a business as a separate legal entity, such as an LLC or corporation.

For example, if your business is sued or faces legal claims, having mixed personal and business expenses can make it easier for plaintiffs or creditors to pierce the corporate veil and hold you personally liable for business debts or legal judgments. This can result in personal financial loss, putting your personal assets, such as your home, savings, or investments, at risk.

#4) Accounting Complexity and Cost

Accounting can quickly become more complex and costly when personal and business expenses are mixed. It requires additional time and effort to sort, categorize, and reconcile expenses to ensure accurate financial records. This can lead to increased accounting costs, especially if you need to hire a professional accountant to sort through the mess and ensure compliance with laws and regulations.

Moreover, if your business is subject to audits or financial reviews, the lack of separation between personal and business expenses can raise red flags and trigger additional scrutiny. This can result in increased audit costs, penalties, and fines for non-compliance, further impacting your business' financial health.

While it may seem convenient to mix personal and business expenses, it is a risky practice. Establishing a clear separation is crucial for maintaining accurate financial records, making informed decisions, and protecting your business' financial health. Otherwise, you could end up with accounting inaccuracies, legal liabilities, and increased costs further down the road.

If you find that you need assistance in either preventing or correcting co-mingled expenses, SIMPLY Financials PLUS can help. We work with businesses to set up best practice solutions utilizing QuickBooks and other available third party applications. Contact us at simplyfinancialsplus.com/contact to learn more about what we can do for your business.

6 Ideas for Upleveling Your Small Business’ Customer Service

Providing great customer service can make a huge difference in the success of any business. Companies known for excellent customer service, such as Apple, Amazon, Starbucks, Publix, or Zappos, are able to leverage skilled teams and sophisticated customer systems in order to provide the service they are known for.

But small businesses can stand out for their customer service too, even if they may not have access to the same level of resources as their larger counterparts.

Done right, good customer service can lead to increased revenue through customer loyalty and referrals. It is also an excellent way to cultivate the social proof (testimonials, case studies, and reviews) that small businesses are always looking to add to their marketing efforts.

Are you looking to uplevel your small business’ customer service? Here are a few ideas to get you started:

#1:  Identify Needs and Preferences

If you want to provide excellent customer service, you should understand your customers' needs and preferences. Conduct surveys or gather feedback from your customers through social media, email, or phone calls. This information will help you identify areas where your customers need assistance and understand how they prefer to communicate with your business.

#2: Train Your Staff

Your staff plays a crucial role in providing excellent customer service. Train them to be customer-focused by providing them with the necessary skills and knowledge to handle inquiries effectively. Encourage them to actively listen to any complaints and concerns, and provide solutions to solve the problem. Your staff should also be friendly, courteous, and professional when interacting with customers.

#3: Use Social Media to Engage

Social media platforms such as Facebook, Twitter, and Instagram can be effective tools to engage with your customers. Post content that is relevant and valuable to them, respond promptly to inquiries and complaints, and use social media to highlight your business's achievements and milestones. By using social media to engage with your customers, you can build stronger relationships and create brand loyalty.

#4: Offer Self-Service Options

In today's fast-paced world, customers prefer self-service options that allow them to find answers quickly and easily. Providing options such as an FAQ page on your website or a chatbot that can answer common questions can significantly improve the customer experience. This frees up your staff's time to handle more complex inquiries and ensures that customers can find the information they need quickly.

#5: Personalize Your Service

Customers appreciate a personalized approach to customer service. Use your customer data to personalize your communications. This can include sending personalized emails, offering customized product or service recommendations, or addressing customers by their name. By personalizing your customer service, you can make your customers feel valued and understood.

#6: Collect and Act on Feedback

Collecting feedback is essential to improving your customer service. Encourage customers to share feedback through surveys, email or social media. Act on the feedback received by making changes that will improve the customer service experience. When customers see that their feedback has been heard and that changes have been made, they are more likely to remain loyal to your business

Give these ideas a try, and watch your revenue grow!

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SIMPLY Financials PLUS works with businesses to set up best practice accounting and bookkeeping solutions utilizing QuickBooks and other available 3rd party applications. Contact us today at SIMPLY Financials PLUS to learn more about what we can do for your business!

It’s That Time of Year – Taxes!

April will be here before we know it, and that means it’s time to start thinking about filing taxes. We have a few tips to share to help ensure you are as prepared as possible to make tax time less stressful–and you might even be able to get them done early!

Tip #1: Catch Up on Your Books

In order to have an accurate tax return, you will want to make sure you have a complete record of all your transactions for the tax year. Automated bank and credit card feeds can make this easier, but if you have cash transactions or receipts lying around that your accountant doesn’t know about, be sure to get those pulled together so nothing is left out.

Tip #2: Make Year-End Changes

Some businesses may need additional year-end adjustments, and now is the time to make them. These could include items such as loan balances if the interest adjustment has not been booked every month, depreciation and amortization, accounts receivable write-offs, accrual vs. cash basis adjustments, and clean-up work. Have your accountant help you with these items.

Tip #3: Double-check Vendor Documentation

If you hire contractors and send them 1099s, make sure you have the proper onboarding documents such as a W-9 for these individuals. You may also want to have a workers compensation certificate from them in order to avoid paying it yourself.

Tip #4: Note Deadlines

Be sure you know when everything is due. Get clear on the deadlines for your corporate, franchise tax, individual and any other tax returns that are required. Even though you might hire someone to complete and file your return, you’ll want to make sure all deadlines have been met, as you are still responsible for timely filing.

Tip #5: Stay Organized for This Year and Next

As you receive your tax documents, keep them together in one place. Whether your preference is keeping digital copies or print copies (or both), figure out where and how you will store them and then file them according to your plan as soon as you receive them. If your tax accountant has a client portal, consider storing the documents there. They will soon need access to them anyway, so you’ll be ahead of the game.

And while you are at it, take a minute to prepare digital or print folders for the next tax year. You’ll be all set up come next April, and during this next year you’ll have a ready place to store any tax-related documents that come in as the year progresses.

Try these tips to reduce tax stress this winter and spring, and if you need assistance implementing any of the tips we mentioned for your business, SIMPLY Financials PLUS can help. We work with businesses on setting up best practice solutions utilizing QuickBooks and other available 3rd party applications. Contact us today at SIMPLY Financials PLUS to learn more about what we can do for your business to make your tax preparation go as smoothly as possible!

Tips for Closing Your Business’ Books Each Month

As a business owner, do you find yourself falling behind in recording your financial transactions and balancing your accounts? It’s easy to let that happen when so many other important business tasks compete for your time.

The secret to staying caught up is to never allow yourself to get behind in the first place. That’s why a best practice for any business owner is to develop (and stick to!) a formal month-end closing of your business’ books. Make it part of the regular activities you do at the end of each month, without fail.

Why? Because closing your books every month gives you a clear picture of your business’ financial situation, allowing you to plan for the future. It also prevents or identifies accounting mistakes allowing for corrections to be made on a timely basis. In addition, filings related to taxes such as sales, payroll and other governmental reporting requirements can be done easily and accurately. You will also have all your documents in order should you need to prepare for an audit or want to apply for business financing.

Ready to get started? Here are some month-end closing tips:

• Record all funds received during the month. Look at customer balances and make sure you aren’t missing any customer payments against amounts invoiced to the customer.

• Record all bills received and purchases made. Vendor statement balances should be matched to what you have recorded, and purchases received

• Reconcile your accounts. Match your accounting records to account statements from outside sources such as bank, credit card and loan statements. Fix any errors you find.

• Review petty cash. Make sure you have recorded all receipts for items you purchased, which should allow you to match the balance of your petty cash fund and replenish accordingly.

• Review fixed assets records. Ensure that purchases of building, equipment, vehicles, and land are properly reflected so that they can be depreciated over time.

• Track and reconcile inventory. Performing inventory counts and matching to your accounting records will allow you to monitor your inventory levels so you can decide what items you need to replenish and how frequently.

• Prepare and review financial statements. Review your general ledger to ensure transactions are properly recorded, and produce a profit and loss statement and balance sheet. In addition, create outstanding accounts receivable and payable reports and take action as necessary.

Closing your books each month will pay long-term dividends to you as the business owner. It will give you peace of mind that your financials are accurate and under control. Monthly maintenance also greatly reduces the chance that you will experience the frustration, loss of time, and potential costs associated with trying to untangle a pile of unreconciled transactions in order to correct an error you found months after the fact.

Do you need some guidance in setting up a month-end closing process for your business? SIMPLY Financials PLUS can help. We work with businesses on setting up best practice solutions utilizing QuickBooks and other available 3rd party applications. Contact us today at SIMPLY Financials PLUS to learn more about what we can do for your business!

4 Best Practices for Managing Accounts Receivable

Cash flow optimization is one of the most important things a business owner can focus on.  Consistent cash flow helps ensure that a business can not only cover its costs but also have a reserves upon which to draw. By taking a proactive, consistent, and systematic approach to managing accounts receivable, a business can avoid the cash flow issues caused by not receiving payments on time, or worse, not getting paid at all.

Here are a few best practices we’d like to share to help you get a handle on your accounts receivable:

#1: Simplify the payment process 

Make it as easy as possible for your customers to pay their invoices. If you accept different payment methods such as ACH, Electronic Funds Transfers (EFT), or credit cards, you will create a positive customer experience and you may even see your customers paying their invoices sooner.  It is worth offering all of these options because not only are these methods safer for both parties than sending a check, but they allow you to receive the funds almost immediately, instead of having to wait for a paper check to arrive, be deposited, and clear.

#2: Create a streamlined and consistent workflow

Have a consistent process for the creation and delivery of customer invoices. Once a sale has been made and a service or product has been delivered, any corresponding invoices should be sent without delay. Invoices and contracts should include terms of payment, and follow up procedures such as sending reminders for outstanding payments should be created.  In addition, develop a process for receiving and recording payments against the outstanding transactions and follow it consistently. 

#3: Use automation whenever possible

Automating your accounts receivable will save time in the billing and collections process.  By using an accounting system to create and send invoices, you will be able to stay on top of all the steps needed in the accounts receivable process. Automation makes it easier to send invoices with a click of a button, to send recurring invoices, to generate and send customer statements, as well as being able to maintain accurate customer data. Automation can simplify your accounts receivable by handling any aspects of the process that can be standardized and templatized, allowing you or your team to save your efforts for those moments when human intervention is required.

#4: Review outstanding Accounts Receivables consistently

Create a process to review outstanding invoices regularly. If you use an Accounts Receivable Aging report from your accounting system, you will know which customers to follow up with, and how overdue their account is. This is another area where automation can help, by allowing you to schedule automatic reminders once an open invoice reaches a certain age. 

It is no surprise that the sooner a business can receive payments for the sale of its goods and services, the better the bottom line.  Following these best practice tips will save you time and money in the long (and short!) run.  

Do you need some help in setting up the systems and processes to better manage your accounts receivable?  SIMPLY Financials PLUS can help. We work with businesses on setting up best practice solutions utilizing QuickBooks and other available 3rd party applications.

Contact us today at SIMPLY Financials PLUS to learn more about what we can do for your business!

5 Best Practices for Managing Accounts Payable

As a business owner, it is important to know to whom you owe monies and when payment is expected. Defined as accounts payable, this is the amount of money you owe to vendors or creditors for the goods and services they have provided to you in your business. The sum of the invoices you owe makes up your total accounts payable on your business balance sheet. This amount will be listed as a liability, as it is money expected to flow out of your business within a certain time and is dependent on the payment terms established with your creditors and vendors.

Establishing best practice processes for your accounts payable, from the initial handling of the actual invoice through to processing and approval, will save you time and money, reducing unnecessary costs (such as interest and late fees) and increasing your operational efficiency. It will also ensure you have the proper controls in place to protect you against potential fraud. In addition, successful business owners know that well-managed accounts payable is one factor that leads to positive cash flow, an important key performance indicator for any business.

Do you need some guidance on best practices for managing your accounts payable? Here are 5 recommendations we have to get you started:

#1: Establish a streamlined workflow process

Having a system for the organized receipt and payment of bills is important to effective cash flow management and control. Your workflow should establish such policies as where and how you receive invoices, how you ensure their accuracy, who approves invoices for payment, and how payment will occur.

#2: Automate with technology

Look for possible opportunities to eliminate manual entry of invoices and receipts, and processing of payment.  There are several cloud-based applications available that integrate with accounting software such as QuickBooks. Use a service such as AutoEntry to automatically enter data from scanned and photographed documents, or tools such as Melio and Bill.com to make payment processing easier.

#3: Create a paperless environment

Look at creating the ability to store documents digitally.  Accounting software solutions, such as QuickBooks, let you attach invoices directly to your bill entry, saving you time if you need to access them in the future.  Using Google Drive as your virtual file cabinet also makes bill storage easy.  

#4: Establish internal controls

Establish separation of duties and internal controls within your accounts payable process to the extent possible.  Separating duties between receipt of invoices, goods and services, approval and processing for payment is important to minimize the potential for fraud.   

#5: Review accounts payable data regularly

Use an Accounts Payable Aging report to monitor what you owe others.  Knowing what you owe and timing of payments to be made will allow you to control and improve your business cash flow. In addition, consistent monitoring of vendors and payments will reduce the potential for fraud.  It is also useful to look at large, or unusual amounts owed or paid and review reports for potential duplicate payment.

Regardless of the size of your business, establishing some of these accounts payable practices will save you time, money, and ensure you have proper controls.  In addition, you will be able to better optimize your business’s financial health by effectively managing your cash flow. 

For some business owners, it may be challenging to set up best practices and manage them. SIMPLY Financials PLUS works with businesses on setting up best practice solutions utilizing QuickBooks and other available 3rd party applications.

Contact us today at SIMPLY Financials PLUS to learn more about what we can do for your business!

How to Get Started with a Bookkeeping Service

Getting started with a bookkeeping service requires some prep work.

You must first select a bookkeeping service that is right for you. This includes comparing their experience, communication style, and technology preferences. 

Then you need to be clear about your ROI when working with a bookkeeper and what you can expect from them, service-wise.

Finally, you need to understand the onboarding process of working with your newly selected service. 

Continue reading for a more in-depth review of each of these key points to cover when getting started with a bookkeeping service. 

What to Consider When Selecting a Bookkeeping Service

Before getting started with a bookkeeping service, there are a few things to consider when making your selection. 

You should look for a bookkeeper with experience in your industry and business size. These bookkeepers know best practices for facilitating growth for businesses like yours.

You also need to look at how closely you would like to work with your bookkeeper. Each bookkeeping service takes a different approach to communication. If you’re searching for full transparency and truly want to play a role in decision-making and analyzing performance (like most successful business owners), you need a bookkeeper who offers constant communication and support.

Technology preference is another area in which you should do your due diligence before selecting a bookkeeping service. Here are a couple of questions to consider: 

• What third-party applications does the bookkeeper use to improve bookkeeping processes? 

• Are you confident and comfortable using those tools to automate your accounting system?

After taking experience, approach to communication, and technology preference into account, you’ll have a better idea of which bookkeeping service is the right fit for your business. 

Once You’ve Selected a Bookkeeping Service, Here’s What You Can Expect 

After you’ve selected the right bookkeeping service for your business, it’s important to recognize their goal will be to gain a strong understanding of your numbers, implement best practices in your accounting system and bookkeeping process workflow, and save you time while improving efficiency. 

This will all be achieved with close attention to detail and constant communication. 

As far as services go, you can expect your new bookkeeping service to: 

• Properly categorize, code, and reconcile transactions

• Reconcile your bank, credit card, PayPal, and merchant service accounts

• Manage Invoices, A/R Aging reports, and collections

• Setup and process payroll

• Assist with Workers' Compensation audits, Personal Property tax returns, and Sales tax filings 

• Create monthly and quarterly financial statements 

• And more

Along with these services, a bookkeeping service will also eliminate unnecessary data entry, paper-intensive, or manual processes with third-party integrations where needed. This will produce a more efficient workflow and reduce the time it takes for your bookkeeping tasks to be completed.

Additionally, some bookkeeping services, like SIMPLY Financials PLUS, provide training assistance for your in-house bookkeeper if needed. 

With each of these services, you can expect your accounting system to drive growth for your business.

How to Get Started with SIMPLY Financials PLUS

Selecting SIMPLY Financials PLUS as your bookkeeping service option is a great business move. Our services are built to help businesses, like yours, reach their goals. 

But before you get into the nitty-gritty of exactly how we will improve your business, you’ll need to provide us with some essential information.

Be Prepared By Collecting Your Important Information

Below is a list of what we need to know so we can better understand your business and financial position. 

Having this information prepared before our initial phone conversation will speed up and smooth out the process:

• Your legal structure

• When/how/who filed your last tax return

• Your bank account information

• Your credit card information 

• Merchant service accounts details

• Your payroll system (do you use a service or do it in-house?)

• Your sales tax requirements

• Do you have employees? 1099 independent contractors?

• Any special requirements for reporting? What about additional reporting requirements internally or externally?

• Your gross revenue over the last two years

• Are your books up-to-date?

• Who is your CPA (tax accountant)? 

• Do you have another financial advisor?

Once you’ve collected this information, we will hop on the phone to discuss the details. 

Let’s Start with a Phone Call

Our initial phone call will be a review of your information so we can get to know you and your business. We will discuss your current processes and accounting practices and get an understanding of the issues you’re facing as a business. 

We will also look at your current QuickBooks files to gain an initial assessment. From there, we will strategize and make a plan. 

Together, We’ll Strategize and Make a Plan

Our plan will be unique to your business. 

We understand you have different needs and budget limitations from other businesses, which is why we rely on custom plans that are built with your business goals in mind.

We’ll Accomplish Your Goals so You Can Do What You Do Best: Run Your Business

Reaching your financial goals is a big part of running your business. However, you didn’t start your business to perfect accounting processes and financial procedures.

This is where SIMPLY Financials PLUS becomes an essential asset. 

With your goals in mind, we will set up best practices in your accounting processes and maintain your QuickBooks file. We will also help produce financial and management reports. With our help, you’ll have everything you need to reach your financial goals. 

Contact us today to get started with SIMPLY Financials PLUS!

Should You Do QuickBooks on Your Own?

When implementing an accounting system such as QuickBooks, a business owner must decide whether to manage it on their own or outsource it to someone else.  While there isn’t a single best answer that applies to all businesses, there are some factors a business owner should consider before deciding to do it themselves with QuickBooks.

To help you determine what’s right for your situation, let’s review some of the advantages and disadvantages of doing QuickBooks on your own.

Advantages of Doing QuickBooks on Your Own

There can be definite advantages to doing your own bookkeeping in QuickBooks. Depending on the stage of your business, your availability to keep up with the bookkeeping, your comfort level with using accounting software, your personal level of organization and attention to detail, and your understanding of accounting and bookkeeping in general, you may experience the following:

You Save Money

A business owner who is just starting out may find outsourcing accounting and bookkeeping services costly.  Doing QuickBooks yourself can eliminate that expense, and if there is a low volume of transactions and complexity, this may be the simplest and best option.

You Stay Involved

Doing your own bookkeeping will keep you connected to your finances, an area that can easily get lost in the day-to-day running of a business. You will be closely monitoring your online bank and credit card balances, seeing how much money you have made or lost, and identifying who owes you money, or what money you owe. You may be able to make more timely decisions for your business, including identifying issues or future growth opportunities. 

You Learn Accounting & Bookkeeping Practices

For those business owners who are interested in adding to their personal skill set, doing your own accounting can be extremely helpful. You’ll learn skills that will serve you well in the early and growth stages of your business, and should the time come when you no longer want to handle the books on your own, you will know what you want from an outsourced accounting/bookkeeping service. 

Disadvantages of Doing QuickBooks on Your Own

The benefits of doing your own accounting come with some downsides as well:

It’s Time-Consuming

According to data collected by SCORE, 40% of small business owners spend more than 80 hours per year on their accounting.  Most business owners will find that they do not have the time to keep up with their own bookkeeping and run their business. 

On top of recording transactions and analyzing data, you will likely have to spend time teaching yourself what you don’t know. This includes information about using the software and accounting in general. 

If you don’t know best practices for using your software, you’ll waste time and miss out on essential information that could be used to grow your business.

You’re on Your Own

Maintaining QuickBooks yourself means you will have to teach yourself what you don’t know.  You won’t have an expert to consult for issues or best practices in the use of the software. You won’t have someone knowledgeable in accounting concepts that would be useful to your business. Having someone to confirm appropriate accounting treatment is key to running your business.  

Business owners also need to make sure they can create meaningful financial statements at tax time to provide to their accountant, to obtain loans, and to and comply with other governmental reporting requirements such as sales taxes and 1099s at year-end. 

Additionally, if you do something incorrectly in QuickBooks, don’t know how to fix an error, or are unaware you are even making an error, you may find that you need an outside resource to identify or correct things. These mistakes can be costly not only to correct but can impact the financial information on which you are basing your business decisions. 

You Could Miss Growth Opportunities or Areas for Improvement

Your QuickBooks file is full of information that can help you grow your business. Not knowing how to create and understand the available financial reports may mean that you’ll be missing growth opportunities. 

In addition to identifying growth opportunities, the financial information in QuickBooks can also provide insight into areas in need of improvement. If you aren’t catching these signs, you are missing out on the full value of your books. 

Partnering with a QuickBooks Expert

While the do-it-yourself approach works for some business owners, most find at some point that bookkeeping is just not their thing or they don’t have the time it takes to keep up with on a regular basis. They may have also found that they have created issues in the QuickBooks file they can’t correct and are not getting the financial reports they need to run their business and comply with governmental reporting. 

In the long run, they may end up spending more money by having done it themselves with clean up and catch-up work that may be required to correct mistakes, improve accounting processes, and make their books current.

Additionally, most realize that they started their business to fulfill a passion or meet a need, not to manage finances. 

So, if handling QuickBooks on your own isn’t for you, look to an experienced accountant. They can help by:

Understanding Your Numbers

Experienced accountants are just that—experienced. They know how to properly manage books and take time to learn your numbers to better position your business for success. 

Knowing Best Practices 

Experienced accountants know the best practices for QuickBooks and can use them to your advantage. 

They can derive essential information from your books and utilize it to build strategies to grow your business.

Saving Time and Improving Efficiency

Outsourcing your bookkeeping to an accountant allows you to spend time doing what you love: running your business. 

You’ll see improvements in efficiency because they make fewer errors and can spot and correct those errors quickly (if there are any). 

Suggesting and Implementing Additional Third-Party Apps 

If additional third-party applications would be helpful for creating efficiencies within your business, your accountant can make sure you build a tech stack that easily integrates with QuickBooks. This is essential should you choose to automate more of your financial system.

Look to SIMPLY Financials PLUS

In the end, no matter what approach you take, SIMPLY Financials PLUS can help. 

If you want to do QuickBooks on your own but have gaps in your knowledge, we can train you. If you want to learn accounting best practices, we can teach you. When your business grows and you can no longer do it on your own, we can do it all for you. 

Contact us today to learn more about what we can do for your business!

Working Virtually: Designing a Paperless Office

Over the last three years, more and more businesses are embracing virtual work. 

Working virtually eliminates the need for paper and provides convenience, flexibility, and efficiency. 

However, making the switch can feel like a daunting task. Exactly how are you supposed to get rid of paper and fully convert your office into a virtual space? 

The answer: create a plan and give yourself plenty of time to make the shift.  

What Does a Paperless Office Look Like?

A paperless office relies heavily on automated systems and processes. 

Because these systems and processes can be accessed wherever and whenever you have an internet connection, paperless processes bring many benefits to the table. 

• Efficiency

  • You’ll notice fewer errors and save time with automatic tracking and updating.

• Improved communication

  • With real-time data, you and your staff can see changes without worrying about which version is up-to-date. 

• Security

  • Papers no longer have to be stored in a filing cabinet or shredded before the wrong set of eyes lands on them. You have an electronic storage system that keeps things safe. 

• Savings

  • With efficiency comes more time and as you know, time is money. You’ll also save on printing and distribution costs - two expenses that really add up. 

Tips for Designing a Paperless Office

Implementing an entirely paperless office takes time. We know from experience. 

At SIMPLY Financials PLUS, we’ve gone entirely virtual with the help of a plan and several key tools. 

For cloud storage, we use Google Drive, for quick and easy communication we use Slack, and for software integration and a smooth workflow we use Zapier - just to name a few. 

We’ve also automated nearly every aspect of our financial processes, and recommend all of our clients do the same. 

Here are a few things to keep in mind as you transition to a paperless office:

Automate Your Processes - Specifically Your Financial Processes

Automating your processes is the first step towards getting rid of paper. It converts everything to a virtual format, giving you the ability to access your information from anywhere. 

We mentioned a few tools in the previous section that are helpful for automating workflows and improving communication, but these are just the tip of the iceberg. 

Where you really start to see results is when you begin automating your financial processes. 

Nearly everything in your financial system can be automated. 

• Bookkeeping - QuickBooks Online 

  • With QBO you can track income and expenses effortlessly on an easy-to-use dashboard. This eliminates the need for manual entry and keeps your finances in one place. QBO also offers invoicing services so you can get paid up to 2X faster. Additionally, most popular automation tools integrate with QBO, merging your information with just a click of a button. 

• Billing/Payments - Bill.com or Melio 

  • Collecting, making, and recording payments is time-consuming and tedious. However, tools like Bill.com and Melio streamline the process. Both tools allow you to easily create, send, receive, and sync your accounts payable. They also allow you to pay your bills with your preferred method and sync the payment info to your accounting system.

• Receipt Capture - Dext

  • Dext easily captures your receipts, extracts the important information, saves the data, and then sorts it to wherever the information needs to go. Aside from snapping a pic of your receipts, you don’t have to do a thing. 

With the right tech stack, there will be very little, if any, manual entry required on your end. Because of this, you’ll notice a sharp increase in efficiency and accuracy within your accounting system. 

Make Sure Your Employees are on Board

As we’ve discussed, going paperless means implementing new technologies. This can be a tricky shift for you and your team. 

Before you implement these changes, outline the benefits to your team. You need them to be on board with the new processes for them to be successful. 

You should also take time to explain to your team what role they will play with the new systems. This takes out the guesswork. 

To help them understand the new tools and their role, create how-to or training videos. Some tools will have these made for you, but if not, give Loom a try. You can easily create and save videos for your team. 

Don’t Expect a Quick Shift

It takes time to fully implement a paperless office. 

At the beginning of the transition, you’ll likely have a lot of info to transfer into a digital format. This can be tedious but will be well worth the work.

Be patient and make sure you allow yourself and your team enough time to adjust to the changes and learn new systems and processes. 

Consult with an Experienced Accountant 

Considering the bulk of transferring to a paperless office involves automating your financial processes, work with an experienced accountant, like SIMPLY Financials PLUS.

We operate as a paperless business and rely on automation to manage our clients’ finances. 

When you work with us, we will help you build a financial tech stack that works for you, guide you through the transition and implementation process, and be there to manage your financials along the way. 

Let us help you make the transition to a paperless office! Contact us today! 

7 Business KPIs to Maximize Performance

To truly know how well your business is doing, it is important to identify and monitor the right Key Performance Indicators (KPIs) for your business. If you aren't using these tools, you can’t fully measure how well any of your forecasts and strategic plans are working.

KPIs will give you additional tools to measure performance and be able to make timely adjustments in running your business.  Regular tracking and monitoring of KPIs will help you reach your business goals, maximizing profitability and improving your business’s financial health.  

Here are seven KPIs that every owner should consider when measuring the performance and profitability of their business:

1. Cash Flow

Cash is the lifeblood of a business. Cash flow tracks how much money is coming in and going out of the business.  Ensuring a business is generating enough cash is important in meeting operating and other future cash needs. 

It is important to track your cash flow on a regular basis.  Doing so will allow you to make any needed adjustments to maintain your business’s financial health.

2. Customer Acquisition Cost (CAC)

Do you know how much it costs you to acquire a new customer? 

Add up your expenses related to customer acquisition (i.e., your sales and marketing costs) for a given period and divide the total by the number of new customers you gained during that same period, and you have your Customer Acquisition Cost. 

This metric is an excellent measure of the efficiency of your sales and marketing team in growing your customer base. The lower your customer acquisition cost, the better job you’re doing adding customers at reasonable expense. 

3. Net Profit

This is the “bottom line,” and it’s as important an indicator as there is. After all, you’re in business to make money, and this is the KPI that tells you whether you’re doing so. Net profit is, of course, revenue minus expenses, and there’s little benefit in revenues going through the roof if there aren’t corresponding gains in net profit.

As with most KPIs, it’s important how it trends over time. Increasing net profit is one of the healthiest indicators a business can have.

4. Lifetime Value (LTV)

LTV, also known as CLV (customer lifetime value), is a measure that indicates the total monetary value a business can reasonably expect to receive from a single customer during the business relationship. Successful businesses that gain customer loyalty have a high LTV. 

In a way, it’s a companion KPI to CAC. CAC tells you what it costs to gain a customer, and LTV measures how much they’re worth once you acquire them. It costs money to find new customers, so it’s important to make the relationship as profitable as possible.

5. Accounts Receivable Turnover Ratio

The Accounts Receivable (AR) Turnover Ratio is another important metric for a business. By calculating this ratio, you can track the rate at which your customers are making their payments, allowing you to have greater insight as to timing of monies coming into the business. 

This ratio is calculated by dividing net credit sales for a given period by the average accounts receivable for the same period. It measures how efficiently a business collects on its receivable and shows the amount of credit being extended to its customers.

A high AR turnover ratio is desirable and will show a healthy cash flow into the business; lower AR turnover means you are extending customers more credit or time to pay than you may want.  Changing payment terms may be helpful to improving your ratio and cash flow.

6. Revenue Per Employee

To generate this KPI, divide your revenue by your total number of employees. This measure allows you to determine approximately how much money each employee makes for the business. The higher the number, the more efficient and productive your staff is. 

This number is especially useful when you compare your revenue per employee against other businesses, but be sure to evaluate this KPI against the benchmark for your particular industry. Some businesses are more labor intensive than others, so the target for this KPI will vary from industry to industry. 

7. Gross Revenue

Gross revenue is a measure of your total sales. It is important to track this metric over time, allowing you to make appropriate operational decisions in order to maintain your business’s profitability.

If Gross Revenue is increasing, it is important to check that your margins are on target. This will help you evaluate whether you can continue to handle the increase with your existing employees, or you need to hire or step-up production to meet the increasing demand.

If Gross revenue is shrinking, look at whether the decrease is temporary or the future trend for the business.  Determine what adjustments need to be made to align with this decrease.  If temporary, can you maintain the business’s current cost structure for the near-term future or do expenses need to be immediately reduced? What other shifts need to be made to align with lower revenues?  

Ready to Maximize Your Business’s Performance?

The seven metrics shown are only a few of the many KPIs on which a business can choose to focus. Choosing the one that makes sense for your business goals is important. In addition, putting processes in place to be able to calculate and monitor the KPIs on a regular basis will increase their value in getting a business to reach its goals.  

Our team at SIMPLY Financials PLUS can help you select the right metrics for your business and work with you to gather the data needed to calculate your KPIs and obtain meaningful results that you can use to make the best decisions to enhance your business’s performance.

Give us a call and we will help you identify what is truly critical to your business’s success, so you can focus on what matters most: running and growing your business.

Why Cash Flow Is Not Just About Revenue

When you think of cash flow, you often think of revenue. However, understanding the differences in what each of these key performance metrics shows is critical for the business owner to understand and evaluate the financial health of their company.

Understanding the distinction between revenue and cash flow is key for you to feel confident your company is on track for success and is financially healthy.

What Is Revenue?

Revenue is the total income from selling products and services. Total revenue is recorded on your income statement.   

Revenue is an excellent indicator of the ability of your team, advertising, and marketing efforts to generate sales. However, just looking at revenue alone doesn’t allow you to consider how much was spent to generate those sales and what a business’s net income is. To get a complete picture, when looking at revenue, an income statement should be prepared on a regular basis and reviewed by management. A profitable business should show that revenues are greater than expenses.

In addition to looking at the revenue, cash flow is another important key metric that should be looked at to provide more insight into your business’ financial health. 

What Is Cash Flow?

Cash flow is the amount of money going in and out of a business. A cash flow statement shows how much money you have on hand at the end of a specific period and helps you understand liquidity.  It is important for a business owner to understand where the money is coming in from and how it is being spent. 

A cash flow statement will provide detail on how changes in balance sheet accounts and income affect the amount of cash that a business has available. The statement is broken down by operating, investing, and financing activities.   

A cash flow statement helps you:

• monitor your liquidity by letting you know how much cash you have so you know what you can afford for day-to-day operations;

• assess business performance by identifying changes in your assets, liabilities, and equity accounts;

• project future cash flows for business growth.

As a key metric, understanding cash flow is critical to your business’ financial health.  

Comparing Cash Flow and Revenue

Just looking at revenue alone does not give a full picture of how well your business is doing.  Revenue reflects sales success and is the top line on your income statement before taking expenses into account. Generating significant revenue does not always mean a business is profitable and has a positive cash flow. 

Cash flow takes the information related to revenue further by starting with the net income of a business and then analyzing the cash inflows and outflows based on operating, investing, and financing activities.  

To fully understand how well your business is doing and how it is positioned for funding future growth needs, you will need to be sure you are tracking both metrics.

Is Cash Flow or Revenue More Important?

Both are essential metrics for successfully running a business. Looking at revenue without considering cash flow doesn’t allow you to see the complete picture of how well your business is doing.

You must track revenues to understand how much money you are earning for selling your products or services. You can then use that information to help guide you in determining how to generate additional sales in the future. Revenue helps you build the income statement, which is required to create the cash flow statement. 

At the same time, you need to understand what's going in and out of your business in terms of cash in order to understand the whole picture. The cash flow statement outlines every detail so you can see what is happening within your finances.

While generating revenue doesn’t ensure positive cash flow, and vice versa, the financial health of your business is reflected in each of these metrics. So be sure to regularly and thoroughly track each of them so you can make smart data-driven decisions to continually improve your business.

Want to Understand These Metrics Better?

Understanding revenue, cash flow, and the forces that affect them is key to understanding your business’ financial position. 

If you’re looking to learn more about how cash flow and revenue drive your business, contact a trusted accountant, like SIMPLY Financials PLUS.

We’ll explain the difference between cash flow and revenue and show you how to properly measure each effectively, so you know where you stand and can make smart financial decisions to grow your business. Healthier financials could be just one call away.

Start the New Year with Financial Clarity

Do you lack financial clarity for your small business? If so, you have company. 

About 60 percent of small business owners aren’t confident in finance and accounting. Many experience confusion understanding their cash flow, managing receivables, and dealing with paperwork.

As a new year gets underway, it’s a good time to get on top of your financials. It doesn’t have to be a struggle. If you’re not sure where to start, there are steps you can take to manage your numbers in the easiest way possible, increase your financial clarity, and effectively track your performance all the way through the year.

Take the Time To Reflect on Your Current Financial State

By now you’ve closed the books on 2021. As part of the year-end process, you’ve reconciled the numbers and, while doing so, you may have noted opportunities for improvement. Now’s the time to step back and think about what those numbers really mean for you and your business. 

What do you like about the way 2021 went, and what could have gone better?

• Was poor record-keeping holding you back?

• Are your processes outdated and no longer getting the job done?

• Are you disappointed in the consistency of your sales numbers?

• Did you miss the mark when it came to managing your expenses?

It’s possible to improve. It takes setting clear goals and laying out the action steps to get there. It takes a commitment to track how well you’re doing against those goals.

Track the Right Data

The best decision-making is always based on accurate and timely data. The proper use of the correct data helps you create stronger, more specific goals. You can then use that data to understand how well you’re on track in achieving them. 

However, don’t track numbers just for the sake of keeping track. Track only the data that’s relevant to your goals. 

As an example, suppose a key goal is to improve cash flow. To accomplish this, you need to track all your expenses. You'll have to know how quickly you’re collecting your receivables and how well you’re managing against your payables as they come due. You’ll want to understand which sales channels are most effective in bringing in revenue relative to expenses. With the right metrics, you’ll be able to see where you can make changes in any of these areas to improve your overall cash flow.

Manage Your Books Throughout the Year

In a sense, record-keeping is like homework was in your school days. Things go a lot better if you do a certain amount every day. You have a lot on your plate, and it’s easy to let review and reconciliation slide. After all, you started your business to meet a customer need and to build your dream, not to hassle with numbers. However, the extra bookkeeping work you do each day will save you time in the long run.

Update your transactions every day or at least every week, and reconcile your accounts every month. When year-end rolls around, you’ll thank yourself for making it so much easier to close the books. 

This also gives you up-to-date numbers that can be used any time you’re faced with a critical decision about the direction of your business.

Focus on the Future

Are you looking backward or looking forward? The past is important, of course, but the fun and excitement of business lie in what might be possible in the future. Sometimes what needs to happen next week or next month occupies all your attention. However, taking the time to map out goals for this year, for next year, and even for three to five years down the road will help you develop the strategies that offer success in the long run.

The future isn’t just about dreaming. It’s about numbers as well. It’s about developing a mindset. 

A focus on the future means:

• You take metrics seriously.

• You rely on a detailed budget.

• You’re diligent about tracking.

• You’re making the financial management of your business a priority.

• You do what you can to reach your business goals.

Work with a Trusted Accounting Partner

Setting financial goals and choosing the right metrics can be challenging. Putting the systems and processes in place to measure progress is a significant task that requires some expertise. 

The good news is that you don’t have to do it alone. A trusted accounting partner such as SIMPLY Financials PLUS can help you clarify and refine your processes. We’ll take a hard look at your KPIs, your processes, your reporting, your cash flow, and your reconciliation. We’ll help you put together a relevant plan and develop the procedures to track that plan.

Approach the new year with financial clarity. Contact SIMPLY Financials PLUS and get assistance developing a plan that’s specific to your company, your needs, and your budget. The road to financial clarity is only a phone call away.

12 Financial Tips For a Healthy 2022 (GUIDE)

Is improving your financial health a goal for your business heading into 2022? If so, great! But have you thought about what it will take to reach that goal?

With an economy that seems to change on a day-to-day basis, knowing which areas of your finances to focus your attention on isn’t easy. And if your goal is as broad as simply achieving financial health, there are a lot of routes you can take to get to that point.

To ensure you reach your goal of financial health, we’ve put together a list of the top 12 financial tips for a healthy 2022. When you focus on each of these tips, financial health will be a byproduct.

Financial Tip #1: Create an Annual Plan and Use It

If you haven’t already started crafting an annual plan, now is the time. An annual plan is a helpful tool you can use to guide your finances through the year. It will serve as a reference point to help you make informed decisions as problems or questions arise. 

Annual plans include everything from marketing strategies to revenue goals to budgeting strategies. When built correctly, it includes everything you need to know to grow and run a healthy business. 

However, creating your annual plan isn’t enough. You need to use the plan as often as possible to see the benefits.

Financial Tip #2: Build and Stick With a Tax Plan

Much like an annual plan, a tax plan can be used as a guide throughout the year. Its focus, however, is creating a strategy for managing your taxes. 

Building and using a tax plan gives you the best opportunity to save the most money. It typically outlines: 

• Deductions

• Credits

• Deferred or accelerated income

• Retirement plans 

• Tax status 

Businesses often push this task off or avoid it entirely, but building a tax plan is worth the time investment and places your finances in a much better position. 

Financial Tip #3: Create and Use Your Budget

A budget is the backbone of your spending. It helps you stay on track and ensures you are making purchases within your means. Your budget should outline every purchase throughout the year, and ideally, you won’t have to spend anything outside of your budget. While this doesn’t always happen, it’s essential to have a guide. 

A budget also aids in pricing because it outlines manufacturing and other costs for creating your products. Your products need to be priced above your expenses, which are included in your budget. 

Remember, your budget is fluid. If you’re reviewing your budget and realize you have additional money, you can shift around funds to increase spending in other areas like marketing, employee benefits, or use it to lower debt.

Financial Tip #4: Increase Your Cash Flow

Cash flow is the lifeblood of your business. As a business owner, you should always be searching for ways to improve it. 

Some of the best ways to increase your cash flow include: 

• Better tracking

  • With better tracking, you can see where money is coming in and out of your business. 

• Improved accounts receivable management

  • You can increase your cash flow when you collect your accounts receivable in a timely manner.

• Low budget variance 

  • Sticking to your budget will ensure your spending (the money going out) is on track.

• Revisited vendor and partner contracts 

  • The vendor and partner contracts you agreed to last year may no longer be the right fit for your business. Revisit them and do what you can to find a cheaper, more realistic option.

• Accurately priced products/services 

  • If your products and services are priced below what they are worth, you will be losing out on money coming into your business.

Financial Tip #5: Keep Up with Your Chart of Accounts

Using your chart of accounts throughout the year is the best way to stay organized. It tracks the money coming in and out of your business. 

A chart of accounts categorizes transactions based on their type. Typically, these categories will include: 

• Assets

• Liabilities

• Equities

• Revenues

• Expenses

Next, they will be broken down into more specific subcategories, making it easy to find a transaction. 

When you record each transaction in your chart of accounts throughout the year, you can quickly pinpoint mistakes as you go. This makes closing your books a breeze at year-end.

Financial Tip #6: Track the Right Data

It won’t be easy to build an annual plan, create a budget, and increase your cash flow with inaccurate or missing data. 

At the beginning of each year, sift through your KPIs to figure out if you are still tracking data that is meaningful for your goals. These KPIs should provide valuable insight for reaching your goals.  

For example, if you want to collect your accounts receivable sooner, track your accounts receivable turnover ratio. This metric gives you the average number of days it takes to collect your accounts receivable. Your goal can then be to lower this number. 

Financial Tip #7: Use Your Data to Lead Your Team

The health of your finances is a direct result of how well you lead your team. There are plenty of different leadership tactics that result in success, however, using data takes a more explanatory approach. 

Data gives you and your team a pulse on the numbers. You can directly explain to your team why you are making decisions the way you are and outline how the work being done is impacting the business as a whole. 

Financial Tip #8: Smooth Out Your Bookkeeping

With good bookkeeping comes better overall control of your finances. Well-managed books throughout the year keep you organized and when year-end comes, make your closing process a breeze. 

Here’s how you can smooth out your bookkeeping: 

• Stay caught up by not waiting to log expense records, income, or employee reimbursements

• Reconcile your accounts on a regular basis. Try monthly, or at the very least, quarterly.

• Learn your bookkeeping tool. Most systems provide tutorials on how you can take full advantage of their product.

Financial Tip #9: Set Goals and Check-In with Them

Like your annual plan, tax plan, and budget, setting goals does nothing if you aren’t actively checking in and measuring progress. 

With the help of data and your team, you can determine whether you are close to hitting goals. This check-in (we recommend quarterly) helps you find mistakes and make adjustments before your goals become out of reach. 

Financial Tip #10: Lower Your Debt

If you are like most businesses, you could benefit from lowering your debt.

Take this new year as an opportunity to lower your debt. Here are a few ways to do it: 

• Build it into your budget. Try factoring in a little extra money towards lowering your debt into your budget. Even if it’s just $100.

• If you save on taxes this year, redirect those savings towards your debt.

• If you bring in more money than anticipated in a particular month, take the opportunity to lower your debt. 

Lower debt leads to a better credit score and high chances of receiving a loan, should you need one down the road. 

Financial Tip #11: Embrace Technology

Automation has quickly become the premier method for managing business finances. It offers speed, efficiency, and accuracy all in one. 

With the help of technology, you can manage nearly every aspect of your finances, including, but not limited to: 

• Sending invoices

• Payroll

• Bookkeeping

• Collecting payments

• Managing documents

As 2022 gets underway, consider all of the ways you can implement technology into your financial systems.

Financial Tip #12: Work with a Trusted Accountant

Last, but certainly not least, we suggest working with a trusted accountant for healthier finances in 2022. 

Not only will they work with you to ensure each of the above tips is being taken care of, but they will also serve as a guide, offering advice and new, better ways to run your business. They’ll be dedicated to your finances, meaning you can trust that all of your tedious financial tasks are getting done while you are focused on running your business. 

Let SIMPLY Financials PLUS be your trusted accountant! Contact us today to learn more about how we can lead you to healthier finances in 2022!

Mistakes To Avoid In Annual Planning

Every business, large or small, needs an annual plan. Have you started yours for the coming year? 

It’s difficult to keep your business and its finances on track without one. But merely creating a plan is not enough. It has to be thorough and realistic. 

Many business owners hesitate at planning because they’re unclear about what an annual plan should include. They’re right to be cautious. After all, there are a number of common mistakes that creep into annual planning. Fortunately, there are ways to avoid them.

Importance of Creating an Annual Plan

Where is your business going next year? Where do you hope to be at year-end? Without an annual plan, without that vital road map to guide you, you have less chance of reaching your goals. As the year unfolds, you’re going to be faced with several major decisions. With a plan in place, you can more readily make choices that align with your goals.

However, if you make some of the common mistakes, the annual plan simply won’t be as useful in keeping you on track. During the planning process, it’s best to follow some guidelines to ensure that all critical aspects of your plan are in place. If you’re uncertain about how to proceed, a good accounting partner can be helpful.

Skipping a Year-End Assessment

Year-end is a busy time, and you may be tempted to shortchange your year-end assessment and focus on the year to come. However, it’s impossible to be certain of where you’re going unless you understand where you are now and how you got there. 

Look at your financial numbers. Analyze why they are what they are. Consider which ones can be improved and how they can be improved.

Assuming you used an annual plan for the year you’re closing out, review it. How did it work for you? What parts were useful, and what didn’t help? Decide how much of your old plan you should carry over.

Not Including a Tax Plan

If you wait until the middle of next year to start thinking about taxes, you may lose your best opportunity to maximize your business’s tax advantages. Many of the decisions you make throughout the coming year will make your tax bill either higher or lower. These include the timing of expenditures as well as recognizing and taking advantage of deduction and credit opportunities.

With a good annual tax plan: 

• You’ll save money

• Reduce liability

• Increase your opportunities 

After all, the less money you turn over to taxing authorities, the more you have to invest in the future of your business.

Excluding a Yearly Budget

How much money can you spend next year? Will you operate within your means? What is your plan to meet unexpected expenses? How will you react if business is better than you expected? You can’t know any of these things unless you have a budget. If your plan doesn’t tell you how you’ll allocate your dollars, it’s little better than no plan at all.

Your budget tells you how much revenue you expect and how you plan to spend it. As the year rolls out, you’ll be continuously comparing your actual revenues and expenses against that budget. With a realistic budget, you can effectively plan to overcome shortfalls or to wisely invest overages.

Making an Annual Plan and Not Using It

Making an annual plan takes some effort, and when you’re finished you’re justified in patting yourself on the back. But the plan isn’t a piece of artwork to be put on the wall and admired. It’s of little value if you don’t follow through and use it.

Your plan tells you what your priorities are and drives your decision-making. You’ll review actual progress against your plan as you move through the year. An important part of this is collecting and analyzing the data around:

• Sales

• Marketing

• Customer involvement 

The better the data you have, the better you’ll deploy the resources you have. Your plan should be a living entity, to be used and even modified as conditions unfold.

Not Working with a Trusted Accountant

If you’re new to annual planning, there’s a lot to understand before you can build an effective plan. Even if you’ve been doing annual planning for years, there may be strategies and best practices you don’t know about. Every business can use an extra set of eyes on its plan.

That’s where a trusted accountant comes in. SIMPLY Financials PLUS is the accountant that does more than just compliance and bookkeeping. We not only keep your financials in order but also know how to create the big picture of where your business is and where it’s going.

Contact us online or call 203-614-8396 to learn how we can help with an annual plan that will boost your profits and improve your business.

Why Good Accounting Is More Than Tax Prep

Small business owners often rely on their own understanding to manage their businesses’ financials--maybe because they believe that accountants are only there for tax preparation. 

But accountants can fulfill a much larger role, serving as a financial guide for the business. They can take all the back-office financial tasks off your plate and give you a personalized checklist of deadlines and documents to keep you organized and on track.

This, along with other essential tasks like keeping your books up-to-date, maintaining a detailed account of expense records and income reports, and having someone who is experienced in reconciling accounts will provide you with so much more peace of mind as a business owner. 

Their financial services will be a huge help, but good accountants also offer more than handling the numbers. 

Why Good Accounting Is More Than Tax Prep

A good accountant will serve as a financial guide for your business. They’ll stand by you throughout the year and support you during that critical year-end period. 

They understand that you have more interest in running your business than you do in managing your finances. So they take all the back-office financial tasks off your plate and give you a personalized checklist of deadlines and documents to keep you organized and on track.

This, along with other essential tasks like keeping your books up-to-date, maintaining a detailed account of expense records and income reports, and having someone who is experienced in reconciling accounts will provide you with so much more peace of mind as a business owner. 

Their financial services will be a huge help, but good accountants also offer more than handling the numbers. 

Good Accountants Help Make Big Decisions

Nearly every big decision for your company is centered on your finances. A good accountant knows your company numbers from the inside out. They will track and compile the right data into meaningful reports and apply what they find to improve weak areas. 

These reports can then be used as reference points for making decisions. With the help of their data-backed advice, you can be confident you are making decisions that best serve your business and drive growth.

Through better decision-making, you’ll see much more success, setting your business up for a bright future.

Good Accountants Help You Plan for the Future

When you manage your own finances, it’s easy for you to focus on the now. A good accountant will help you look towards the future. 

With a forward-looking financial system as the goal, they’ll supply your company with vital information like: 

• Detailed budgets

• Sales goals

• Cash flow forecasts 

All of which can be used to prepare for the future. 

From there, a good accountant will implement systems and processes that will be used to ensure you’re hitting each of your benchmarks and getting the most out of your reports. 

Once these systems and processes are put into place, they can be used for years to come. Should your business begin to outgrow them, your accountant will make adjustments, so they can continue to serve you and your business as best as possible. 

Good Accountants Are Dedicated to Your Finances

When you hire an accountant, their main focus is to manage your finances. There are no distractions; improving your financial state is of utmost priority. As a result, they can spend time implementing systems and processes and tracking progress for your business.

For example, QuickBooks accounting software is the most popular system on the market. More than 29 million small-to-medium business (SMB) owners in the US use this system for bookkeeping. Using QuickBooks is easy, however getting the most out of it takes a strong understanding and can require a lot of upkeep, something many business owners don’t have the time to dive into. 

Good accountants will know how to work systems, like QuickBooks, and use them to your advantage. You won’t have to take the time to figure out the ins and outs because they’ll do it for you. Your financial success is important to them.

Good Accountants Add Experience to Your Finances

You may understand the basics of your finances, but good accountants have a much better, deeper understanding. They are trained and certified in the latest accounting practices and most are constantly studying to stay up-to-date with trends and new information. In other words, they are experts, and they are always evolving. 

Good accountants know what it takes to run a successful business from a financial perspective. When you let the professionals handle the heavy work, you save yourself the hassle and burden of all things financial. This includes:

• Bookkeeping

• Financial strategies

• Planning and budgeting

• Payroll set up and processing 

• And more

Anything that has to do with money will be taken care of by someone who has a deep understanding of it.

Turn to SIMPLY Financials PLUS

If you are looking for a good accountant to act as a financial guide to your business, contact SIMPLY Financials PLUS. We have the time, knowledge, and understanding to help improve your accounting systems and processes and we will work with your tax preparer to ensure everyone is on the same page to grow your business. 

Let our team of accountants and software services work to manage your accounting and bookkeeping needs. Whether you are just getting started and have no idea where to begin, or you are a pro at managing your finances, we can help you. Give us a call at 203-614-8396 and let our team set you up with the right services for your company.

What is a Chart of Accounts and Why Does it Matter?

Do you have an accurate way of tracking and recording the money that is coming in and out of your business? 

A better way to ask this question might be: When you need information about a past transaction, how easily are you able to find it? 

If you are not using a chart of accounts (or using it properly), your answers to these questions are probably not what they should be.

This article will describe what a chart of accounts is and the importance of having one for your business. By the end of it, you'll also pick up some valuable tips you can implement to improve your chart of accounts.

What is a Chart of Accounts?

A chart of accounts provides your business with a financial statement listing all accounts on your general ledger. Essentially, it is an organized breakdown of every transaction your business makes. Your chart of accounts is divided into categories and subcategories based on the type of transaction. 

Typically, a chart of accounts will include categories for assets, liabilities, equities, revenue, and expenses. As you make a transaction, you’ll record it under one of these categories. Then you’ll go into more detail by breaking up each of your categories into subcategories. For example, your assets section will likely be broken down into current assets and long-term assets. 

You can think of a chart of accounts as a magnifying glass for your transactions. When you need a closer look, you simply “zoom in” on the category, then the subcategory your transaction falls under. 

Benefits of Using a Chart of Accounts

There are several benefits to maintaining a chart of accounts. 

One of the more obvious benefits is that it allows you to quickly find transactions. Let’s say your landlord is under the assumption you didn’t pay last month’s rent, however, you know you did. Instead of sifting through paperwork, searching for receipts, or doing other time-consuming tasks to prove you paid, you can just head to the expense section of your chart of accounts and find the logged transaction.

Additionally, organization is key when it comes to managing your finances and a chart of accounts is the first step in keeping everything in order. It maps out all of the money within your business, telling you where it is and where it’s going. As you manage your finances, you can refer back to it to ensure you are on track. 

For example, the expense section of your chart of accounts is helpful when reviewing your budget. To find out if you are on track with your budget, you’ll simply turn to the expense section of your chart of accounts. Every transaction will be listed and from there you can determine how close you are with your budget. 

Along with having a strong system for tracking and reviewing your goals, one of the most useful benefits of a chart of accounts is that it helps build strong reporting. 

Because your chart of accounts is ideally up-to-date and well organized, you will be able to pull information from it to build other key financial reports. These reports are then used to: 

• Make strong business decisions

• Determine growth opportunities

• Measure the financial success of your business

Using a Chart of Accounts

To get the most out of your chart of accounts, and reap the benefits outlined above, every time you make a transaction, record it in the proper account. This includes everything. No transaction is too small to be included on the chart of accounts. Remember, the more accurate and detailed your chart of accounts is, the more useful it will be.

Your transactions will fall under two overarching sections: the balance sheet and the income statement. 

In the balance sheet section of your chart of accounts, you will include these categories: 

• Assets

• Liabilities

• Equity

In the income statement section of your chart of accounts, you will include these categories: 

• Revenue

• Expenses

You will then break down each of those categories into subcategories that make the most sense for your business and log each of your transactions according to their subcategories. 

Again, the more organized your chart of accounts is, the more helpful it will be.

Extra Tips for Your Chart of Accounts

To get the most out of your chart of accounts, here are a few final tips. 

While you may be tempted to set up an abundance of subcategories, don’t create too many. Too many subcategories can actually overcomplicate your chart of accounts and make finding information more difficult. For example, you don’t need a subcategory for each transaction, that defeats the purpose. Place things with commonalities together, so you have clear subcategories. 

For a chart of accounts to work efficiently, you need to use it consistently. You have to log each transaction, otherwise, you’ll be right back to square one. The tracking and recording you do now will save you time in the long run. 

Finally, stick with your subcategories throughout the year. If you notice a subcategory isn’t being used like it was at the beginning of the year, don’t take it off your chart of accounts. Keep it until the end of the year, this way, should you need it, it’s still readily available.

Avoid combining subcategories as well. This can confuse you and won’t be helpful. Stick with what you created before. However, if you need to add a subcategory, you can do so and it won’t affect the way you log your transactions. 

Work with a Trusted Accountant

If you have any questions about using a chart of accounts, work with a trusted accountant. They’re experienced and can provide guidance to building a chart of accounts that fits your business.

An accountant, like SIMPLY Financials PLUS, will work with you to ensure your chart of accounts is set up properly, so you can reap its benefits. 

We are here to point you in the right direction. Contact SIMPLY Financials PLUS today to learn how we can help you grow your business!

Leadership Starts With Good Numbers

As a small business owner, the way you lead reflects heavily on the success of your business. 

You want your team to react positively to your leadership style, but with so many factors to base your strategy on, it can get complicated, especially if your team begins to question why and how you do things. This is why many small business owners are beginning to rely on their data to help them lead their teams. 

Taking this approach is beneficial in more ways than one, but you may be questioning how your numbers can help you lead your team. 

We’ll answer your questions below and even share ways you can implement this leadership strategy into your business. 

How do Numbers and Leadership Connect?

If you’ve read any of our other blogs, you’ve likely realized the importance of tracking and recording accurate, essential data. 

Doing this:

• Builds a strong foundation for pulling and using the right reports

• Points you to areas where adjustments need to be made so you can improve your business

• Gives you an overall read of the financial state of your business

With these solid, accurate numbers you can make leadership decisions knowing you have concrete support. Your better, data-backed decisions will positively impact your business and team members, which leads to more success. 

Why You Should Rely on Numbers to Lead

As previously mentioned, relying on your numbers to lead comes with many benefits. You’ll be able to: 

• Make better decisions

  • Decision-making becomes easier when you rely on data. It provides a point of reference and form of support when making or justifying a decision. It’s likely your team will question a decision you’ve made at some point or another, and with data you can provide an explanation for why you did what you did.

• Improve connection on multiple levels

  • Connection is a huge benefit of relying on your numbers to lead. Data is a representation of how your customers respond to your team, which connects their work to your customers. From there you’ll see results, which will connect your team to goals and the overall success of the company.

• Hold yourself and your team accountable

  • No matter which way you choose to lead your business, accountability will likely be a top priority. When you lead with data, you and your team know performance is being tracked and used as a tool to measure business growth. Knowing this sparks a desire to work harder to reach goals and benchmarks, considering all eyes are on you and your team.

Ways to Implement Data in Your Leadership

Implementing data into your leadership isn’t as complicated as it may sound. There are just a few things you’ll need to keep in mind to ensure you are using this system effectively. 

1. Collect Meaningful Data

Your data needs to be meaningful. This cannot be stressed enough. With unnecessary data, you’ll be wasting time. So track KPIs that provide insight into areas that will help you reach your business goals. This step is key for making important decisions. 

2. Be Knowledgeable

Without a good understanding of the metrics you’re tracking, you’ll have a hard time explaining to your team why they matter. Lead by example. You can’t expect your team to be knowledgeable if you aren’t. Make sure you are actively learning and analyzing your data so you can reinforce its importance with your team. Remember, it starts with you.

3. Have Clear Expectations

Make sure you have specific goals, desired outcomes, and clearly define what you expect your data to accomplish, then share it with your team. This is essential in leading with data. It provides your team an answer to their “why.” When you have solid goals, you can use your data to show your team how their work is helping the business reach those goals. 

4. Work With a Trusted Accountant

Working with a trusted accountant ties the prior steps together, and then some. They will make sure you are tracking the right numbers, pulling the right reports, and have a strong strategy in place for implementing changes to improve the financial state of your business. Once your strategy is in place, they will help and even suggest big decisions (based on your data of course) to push your business to the next level. 

They will also serve as your go-to data dictionary. Any questions you have, they’ll be able to answer, which will grow your knowledge and help you stay in the loop with all things data, making you the perfect example for your team. 

A trusted accounting partner will also work with you to create goals for your business. You’ll be able to share these goals with your team, knowing they are solid and meant to help the business grow. 

At SIMPLY Financials PLUS, we know what it takes to lead a business with numbers. We can help you use your data to get your business from where it is now to where you want it to be. Set up a call with us today to learn about the role we can play in growing your business.

How to Get the Most Out of QuickBooks

As a small business owner, it’s essential to do what you can to optimize every dollar you spend. By managing your own finances, you can keep a pulse on the money flowing in and out of your business.

In the US, 29 million small business owners rely on QuickBooks to help them manage their finances. It’s no coincidence that so many people rely on this tool to help their businesses succeed.

While there are plenty of business owners reaping the full benefits of QuickBooks, many are not taking advantage of its full potential. 

Luckily, we’ve compiled a few tips to help you get the most out of QuickBooks. 

Learn the Basics

The first step in using QuickBooks is to take some training courses. This will give you more knowledge on how to use QuickBooks and help with speed and efficiency. QuickBooks offers plenty of free training and tutorials to help the learning process go more smoothly. You will be able to understand the ins and outs of QuickBooks when you have the basics down pat, simply by going through training.

Have you used QuickBooks in the past and think you are ready? Not so fast! Things that are updated from previous versions are covered in the new training modules. These trainings are updated with current accounting practices and regulations to ensure your records meet requirements. This is incredibly useful if you are running your own business. 

Set Up Recurring Transactions

In your line of work, you have bills you pay on a regular basis. QuickBooks allows you to set up recurring transactions, making record keeping a breeze. The accounting software, in essence, memorizes your recurring transactions including:

• Checks

• Bills

• Invoices

This function means you can automate transactions on a month-to-month basis, eliminating the need for you to keep track of due dates.

Additional features let you schedule daily, weekly, monthly, and quarterly posts. Quarterly payments are ideal for managing tax payments as a company owner. You may likely use weekly payments to handle payroll for employees. Daily posts can account for those one-off posts that happen sporadically, or for a few days in a row, but not every week, month, or quarterly.

This way, you don’t have to remember to pay them individually. This also alleviates room for error. Instead of having unexpected late fees pop up, you may qualify for a cost reduction thanks to automated payments.

Enable Custom Reporting

Did you know that you could set up custom reporting on QuickBooks? You can, and it’s an excellent feature! It allows you to select what reports you want to run so that you have all of the info you need to make sound financial decisions. The fields are customizable, freeing you up from mundane bookkeeping tasks, and allowing you to collect your ideal data. 

For small business owners who are diligently trying to save money, custom reporting will help with setting up goals and milestones. You can pull:

• Budget reports

• Forecasts

• Cash flow statements

• And more

To use as benchmarks for helping your business reach new heights. With QuickBooks, you’ll be able to turn to your reports and easily identify where you need to make adjustments, and where you hope to expand in growth.

Receive Payments from QuickBooks

Whether you want to have a place to receive payments or to submit payments to vendors, you can do it efficiently in QuickBooks for a small convenience fee. This aids in managing your accounts receivable process. Instead of sifting through invoices, determining whether they’ve been paid, and then heading to the record books, QuickBooks will do it for you. 

The organization tools also help you find missed payments and/or mistakes in reconciliation, smoothing out your books and saving you time in the long run. 

Another advantage to using this QuickBooks feature is it allows you to keep everything in one place. These accounting services are accessible online from anywhere you are running your company, which is great for busy, on-the-go entrepreneurs.

Choose Other Tools That Work with QuickBooks

While QuickBooks does a lot, there are some accounting services and tools they don’t offer. When you go to automate other processes, make sure they are compatible with QuickBooks—most are. 

You may also find yourself needing assistance in payroll management, accepting e-commerce payments, etc. Search for tools that work with QuickBooks so you can be sure everything will flow smoothly together.

Work with SIMPLY Financials PLUS

Here at SIMPLY Financials PLUS, we use QuickBooks to help us manage clients’ accounting. This means we can handle all of the above for you, so you don’t have to. 

We are experts and know what works best to get the most out of QuickBooks. In addition, we also offer QuickBook training for busy professionals, so even if you decide to do your accounting on your own, we can still help.

Contact us to learn more about outsourcing your accounting and getting the most out of QuickBooks!