Bookkeeping is one of the most vital processes in any business. More than developing products and selling, it’s effective management of the flow of revenues and expenditures that ultimately makes a business fail or succeed. Don’t be discouraged if you don’t have extensive accounting experience – just invest in accounting software, and you’re good to go.
But with the many choices available, how do you know which kind is best for you? Here are some questions to ask yourself.
What is your budget? Determine how much you are willing to spend on your accounting software to help limit your choices. As a general rule, software programs with more features have higher price tags, so be prepared to spend more if you need a lot of functionalities. You would be surprised to find very good accounting software for amazingly low prices, though, especially the ones designed for small businesses. Keep your mind (and eyes) open.
Is it user-friendly? To cut the downtime in training your staff or yourself to handle the software, it has to be easy to use in the first place. Look for something that is simple with regard to three aspects: installation, set up, and navigation.
Does it have all the accounting modules and reporting categories you need? The most basic modules that accounting software must include are accounts-payable and accounts-receivable modules. You should also look for simple reporting categories that allow you to easily generate and print reports such as cash flow for a customized period, forecast reports, receivables reports, etc.
It’s a good idea to invest in slightly more expensive but very helpful expandable features; the software must be able to handle your growth (if you add a product line or more employees on the payroll, for example).
Does it offer after-sales support? Choose accounting software that comes with a complete FAQ package (for both technical and accounting topics), a toll-free call center, and maybe even live online support.
By: Eric Morris
Posts Tagged ‘Cash Flow’
Accounting Software
January 23rd, 2010Using the Cash Method For Tax Accounting
January 10th, 2010
When submitting tax figures to the IRS, there are 2 types of accounting methods to use. The 2 accepted methods are the accrual and cash methods. The business is responsible for choosing which method the company will use.
Many issues can be factored into the decision or the selection can be as easy as a personal desire. Bigger companies usually take more procedures into account like volume of sales, how much inventory is stored, number of sales, the past experiences of an accountant, and the list keeps going.
The cash method of tax accounting records all transactions and income at the time of payment. Even if the sale was made the previous year, according to the tax accounting books, the income is recorded when the payment is physically received.
For small businesses that may not pay a secretary or have an accounting staff, the cash method of recording tax accounting is fitting. With this method, accounts and sales are left open until the full payment is received. Using the cash method helps small businesses be aware of what accounts have been completed and closed and which sales have not been collected on yet.
The procedures of small businesses can range anywhere on the spectrum. Some are very rigid and have all paperwork filed within minutes of the transaction and some don’t have access to files or a computer for a day or two. When agreements or sales are completed on the road, outside the company walls, it takes discipline to get every sale receipt back to the file cabinet.
If partial payments are made over a long period of time, cash accounting will work well to show consistent income. When using cash accounting, these transactions reflect the cash flow accurately. Since cash accounting records each installment, the actual money received would be consistent and relatively even. Payment plans can last for several years if the product or service is very expensive. When longer plans are used for larger sales, this method will show more consistency.
When income from sales is needed to pay for operating expenses, cash accounting will accurately show the amount of money that was earned and can be used to pay those bills.
Once the tax accounting method on a cash basis is selected, it is next to impossible to efficiently change the method. If a change to the accrual method is desired, the cash method must have been used for the last two consecutive years. At that time, a formal request must be submitted to the Secretary of the Treasury. To make sure this process is done correctly and all the bases are covered, the owner/officer of the business should consult with a certified public accountant.
By: Joe Coffee
Tax Solutions Made Easy
January 8th, 2010
When you are faced with tax dues to the IRS and you are unable to pay them you are left with three main options: one is to pay the whole amount which in most cases is an impossibility because of bad financial state, second is to make the payments in installments and third is to make a partial payment and get the rest waived away. But in order to get help with tax related issues the ideal thing to do would be to seek professional help like USA Tax Help to sort out the situation. If you try to handle the matter by yourself you may land up in a further mess.
This is because a complete working knowledge of the IRS system is needed to make the right arrangements.
What can USA Tax Help do to help in tax obligation reduction? They do the following:
• A complete analysis: They gather details about your tax liabilities and all the past communications from the IRS. They get into an analysis of all your assets and liability statements; they also judge your cash flow every month. After getting an idea about what the future potential cash flow can be they go to the next step.
• Recommendation: Based on their financial analysis of your status they give you a list of options in the form of recommendations – you can choose the one that will most suit your situation.
• Represent you with IRS: They can be your Power of Attorney and provide you with IRS transcripts and the Statute of Limitations expiration date.
• CDP hearing: USA Tax Help is a tax help business that can arrange for a CDP hearing which entitles you to put forth your case to the authorities. Once this hearing has been arranged – till the time it happens all collection efforts from the IRS will be put on hold. During the hearing itself you would be arriving at an alternative solution to satisfy your tax obligations. You might settle for an Offer in Compromise or installment payments.
• Installment arrangement: In case you have the capability to pay a small amount every month then IRS provides you with this option albeit with a cap on the time you can take to do this. A professional firm will let you work out your cash flow projections to your advantage and thus get your monthly commitment reduced to a large degree.
• Offer in Compromise: This option opens up for you when you are not able to pay up your owed amount. In such a case IRS is ready to waive a certain portion of your arrears and would accept the rest of the payment in lieu of the overall settlement dues. This again needs your financial status to be put forth in a specific manner that will get you a maximum waiver.
With USA Tax help you are in safe hands because you get prompt service with the most efficient and effective service with an ultimate decrease in the amount you owe to the IRS.
By: David Locey