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Bookkeeping is the process of collecting and organizing data on all of your business’s financial transactions. Every expense, payment, as well as any profit is accounted for. This includes sale invoices, payroll ledgers, accounts receivable, assets, and liabilities. Bookkeeping is essentially your business’s cash flow management. It shows how well the company is performing and which areas need attention. Documenting all cash flow in detail gives you a complete overview of your financial activities and your business’s financial state. This overview of the types of bookkeeping will touch upon the difference between single-entry and double-entry bookkeeping, what methods of bookkeeping exist, and how important regular recording of financial transactions is for running a successful company. Basic Bookkeeping Transactions Incoming and outgoing finances are the two main types of business transactions under your bookkeeping.  Incoming finances are your income/revenue, which is all the money earned, sales, and profits. In turn, they become assets, which are all the existing property owned by your business. Any preexisting cash and property are also included.   Outgoing finances are the company’s liabilities - mandatory payments, taxes, and loan installments - and expenses: money used to pay for services, employee salaries, and operational costs.  After these two main bookkeeping categories, we have equity or the difference between the company’s assets and liabilities. How Does Bookkeeping Differ from Accounting? Bookkeeping needs to be done first, before the accountant can analyze the company’s books. It is an essential part of any business finance management. Accounting is the later process where all collected and complete financial data - the trial balance - is analyzed. Accounting includes drawing financial statements based on which timely business decisions can be made. Accountants are also responsible for financial advice and tax returns. Methods of Bookkeeping and How They Work Let's take a look at the specifics of the single-entry and double-entry method. Single-Entry The single-entry method records individual transactions as they happen. Once a sale or payment is received, or an expense is made, it’s documented as a stand-alone entry, plus its minimal details. This bookkeeping method is best suited for smaller businesses. It’s also adequate for operations where there’s little to no physical sales or inventory involved, i.e., digital transactions, services, and those with little or no physical goods to exchange.  Single-entry systems offer multiple advantages: They are simple and therefore save you time and money. Besides, they usually don’t require additional staff or training.  Of course, there are some downsides as well. These include possible loopholes that can be exploited to cover up mistakes and fraudulent transactions, especially if no software or app is used and everything is manual. Furthermore, there is no fast way to check for balances, liabilities, and on-time payments, which can result in penalties and late payments. Also, arithmetic errors in the account totals are relatively common. Using these simple bookkeeping systems for small businesses is a feasible solution, but it most likely won’t be enough for complex operations, where ready financial snapshots are often necessary to help make informed and timely decisions. Double-Entry Double-entry systems are more complex since every transaction is entered twice: in the left-hand account under Debit and in the right-hand account under Credit. Double-entry bookkeeping is used for larger and more complex business operations, and it works like an error-detection tool since the sum of debits must always equal the sum of credits. If it doesn’t, it points to an error. Using the double-entry system makes it easier to monitor all activities and ensure all your books are balanced. The rough total of your capital gap is easily determined.  However, it’s a time-consuming and costly process, and utmost accuracy is needed when making entries. It usually requires extra training, staff, and software for it to be fast and effective. Also, due to the complexity of the system, finding where the error is and correcting it can be challenging.  Compared to the single-entry bookkeeping system, double-entry is a more thorough, time-consuming approach to bookkeeping. Most smaller businesses don’t have time, resources, and extra people to work on detailed bookkeeping. But the results help companies cover everything being exchanged. It also provides instant access to all data.  These are the two basic systems a company can use for bookkeeping. In the past, all entries had to be made manually. With the advancement of technology, various kinds of accounting software and apps have come to the bookkeepers’ aid. Digital Bookkeeping Systems Businesses can reap many benefits from using bookkeeping apps. All primary operations are automated and can be carried out remotely from your phone anytime, anywhere. The main features and automated functions of these apps include: Tracking all outgoing payments and fund transfers Digital tracking of all incoming finances Reports available anytime for mass sending Encryption of financial and confidential business data Apps for both iOs and Android devices Affordable monthly rates starting at $9 External functions such as e-filing and online banking Bookkeeping software such as Quickbooks, Freshbooks, and Zoho have basic accounting features in addition to their comprehensive tracking and management systems. Smaller businesses employing the single-entry method can use these apps to speed up the process further and increase accuracy. If you own a small business and are bent on cutting costs, the chances are that with one of these apps, you won’t even need to hire a bookkeeper - you’ll be able to do the bookkeeping yourself. Virtual bookkeeping means that independent, remote bookkeepers will manage and balance your books instead of a physically present bookkeeper. This is often a time- and cost-saving option for companies. A virtual bookkeeper can manage and monitor your finances in real time beyond office hours. It can be a good solution for companies with a bigger budget allocation specific to these tasks, covering many departments and their complex financial dealings for the company. Often, there are inventories and accounts payable and receivable that need to be checked and prioritized. How Bookkeeping Benefits Your Business There are many advantages to bookkeeping. Financial insights from tracking all your financial transactions will help you manage the business, maintain supplies and payrolls, and keep payments on time. This way, you’ll avoid costly penalties and other negative consequences of late payments.  All numbers will match when your books are balanced at the end of a month, quarter, year, or another specified period. These detailed lists of numbers may look complex and intimidating, but when laid out and checked, they’ll enable you to easily assess priorities.  Even just a simple bookkeeping system can help detail the financial state of your company. Your working capital gap is a good indicator of this - it’s the total difference between your assets and liabilities.  Positive cash flow is maintained and received on time. From here, you can allot budgets and give priority to specific expenses or additions to inventory or assets. Being able to execute the business’s balances correctly and on time will help the company deal with loans, bank payments, and other obligations more efficiently. All of the bookkeeping methods discussed here will help you control your company’s finances and can be a big help to avoid penalties and bigger financial issues when going through an audit process.  

August 27,2021
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News

Finance

Apple card users will now be able to purchase the newest iPhone models with zero-interest over a 24 month period.This Wednesday, Apple announced a new financial feature for iPhone users. In the next several months, Apple users will be able to purchase new iPhone models with zero percent interest for up to two years. Apple Card cardholders will be able to buy Apple products while avoiding traditional fees associated with credit card purchases. Moreover, the newest offer promises a 3% cashback after each iPhone purchase.This could be a starting point for a new "Apple Prime" subscription model. This model would be designed on the same principles as Amazon Prime, providing fast and free shipping."Apple Prime" would integrate a variety of existing Apple tools and features, such as Apple Music, iCloud, Apple TV+, Apple News+, and Apple Arcade in one subscription model. Apple hardware subscriptions would allow users to bundle additional Apple services such as AppleCare when purchasing Apple hardware.This comes as no surprise since Apple already provides a variety of cost-effective options. The company has already started with promotional plans for upgraded packages. For example, the existing student Music Plan now comes with Apple Music and Apple Plus features, while the monthly price stays at $5.Apple trade-ins, one of the company’s promotions which has been on the table for a while now, allows users to buy the newest model of the iPhone for a much lower price. At the official promotion of the new iPhone 11, in September 2019, Apple announced a cost-effective solution for users who already have the latest version of the iPhone. Apple emphasized that the iPhone 11 could be purchased for only $399 instead of $699 if an iPhone 8 was traded in for it. On a monthly level, the costs of purchasing would be only $17. Trading in an iPhone X for iPhone 11 Pro would bring the monthly payment down to $25.

November 02,2019
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Small Business

Amazon is starting the Amazon Small Business Academy to help small businesses, startups, and small company owners to enhance their online presence and increase sales through a series of webinars and classes.That's the bottom line of the announcement released by Amazon yesterday. According to the Small Business Administration, small businesses and startups make 99.9% of U.S. businesses. Almost 60 million people work for small companies, which makes this type of business vital for the U.S economy. Amazon's initiative includes a number of online seminars, meetings, and presentations created in order to educate entrepreneurs and help them empower their brands."Amazon Small Business Academy is focused on accelerating small business’ digital capabilities, whether they are a brand new company or one that has been in business for generations,” said Nicholas Denissen, Amazon Vice President of Small Business.The first seminar, held today in Mississippi, presented a special guest, U.S. Senator Roger F. Wicker. Amazon hosted around 100 attendees introducing them to the newest business strategies and methods for growing sales.The next event is planned for December, but the location has not been announced. This will be followed by a series of in 2020 held across the United States.Additionally, Amazon Small Business Academy provides grants for supporting digital business courses that will start in February. The courses will be held by the following colleges: Ohio and North Idaho College in Coeur d’Alene in Idaho; Bunker Hill Community College in Boston; State Center Community College in Fresno; Houston Community College in Houston; and Red Rocks Community College in Lakewood.The Amazon Small Business Academy also provides webinars aimed at helping small business owners develop digital competences and improve marketing skills. These webinars include information on how to increase sales in an Amazon store, and allow users to ask questions live and communicate with experts.Small businesses and startups sell 4,000 items every minute through Amazon stores. According to the latest statistics, 58% of Amazon's online sales are made by third-party sellers — small- and medium-sized companies. In order to help small businesses increase their sales online, Amazon released 150 tools and features in 2019 as part of their $15 billion investment in the success of their selling partners.

November 02,2019
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Small Business

Small businesses in industries sensitive to changes in the housing market are experiencing sales drops as fewer homes are sold — a result of higher home prices and a shortage of listings. Home prices have risen in 95% of cities, with the highest increase noted in the Mountain States, an area which includes Colorado, Arizona, and Idaho, among others. The city of Lansing, MI, experienced the most dramatic increase: 25.1% in year-to-year gains. Despite a promising rise in July and August, the number of existing-home sales fell in September by %2.2. With the median home price at $272,100, lower mortgage rates aren’t enough to entice buyers. Additionally, fewer people are putting their homes on the market. Many current homeowners purchased or refinanced their homes at a time when mortgage rates were lower than the present ones. Moving today would mean paying higher rates, which is disincentivizing.The drop in home purchases is creating a domino effect and impacting a wide array of small businesses. Most people renovate their homes before putting them on the market, so fewer sales mean less business for contractors, many of whom are small businesses. The decline is expected to continue into the third quarter of 2020. Chris Herbert, the managing director of Harvard University’s Joint Center for Housing Studies, predicts: “Continued weakness in existing home sales and new construction will lead to sluggish remodeling activity next year.”Besides contractors, furniture sales outlets are also feeling the blow, as people are much more likely to purchase furniture when moving into a new home. The Commerce Department reports that sales are down 0.2% in the first nine months of the year, compared to the same period last year. Appliance and electronics retailers aren’t faring any better, with sales down 3.9% for similar reasons. While these figures include retailers of all sizes, small businesses tend to mirror changes observed in their larger counterparts.

October 29,2019
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Small Business

The owners of small businesses and startups say finding more effective ways to increase workforce productivity is their main concern.That’s the bottom line from a report based on online interviews of 319 small-business owners. According to the study, 54% of them find "improving productivity and efficiency" the greatest challenge they face. The survey was conducted by Oasis, a professional employer organization that provides HR administration, employee benefits, healthcare management, payroll administration, and other services to small-business clients. Oasis is a subsidiary of Paychex.The survey revealed a handful of additional difficulties that small businesses struggle with:- 41% of owners say that attracting quality employees to join the business can be extremely difficult.- 33% are occupied with developing employees to be able to contribute at higher levels.- 33% say that keeping employees focused on what's most important for business can be challenging.“Administering payroll, complying with employment regulations, and offering competitive health benefits are specialized skills that require time and resources. These tasks can be a distraction from the work that needs to get done in acquiring customers and growing the business,” says Melissa Ness, a regional director at Oasis.Furthermore, according to POSQuote, Point of Sale Systems can increase productivity in retail businesses, such systems help manage payroll, sales reports, accounting and many other business functions.Although 87% of small-business owners think time spent on HR and work-related issues is crucial to establishing good workflow, many say they find these employee-related tasks overly time-consuming. Thirty-one percent of company owners say that they lose more than a quarter of their work time to these duties.To save time and resources, more and more small business owners are seeking to outsource these activities: attracting quality employees to join the business, leveraging software for better remote working collaboration, improving productivity and efficiency, and employee retention and engagement.

October 22,2019
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