3 Major Benefits of Updated Bookkeeping and Accounting Records

3 Major Benefits of Updated Bookkeeping and Accounting Records

(This story originally appeared on Due)

Last week in a discussion with a business coaching client, I asked if she had updated bookkeeping and accounting records that would help her make the best business decision for a big question about her business. “No,” she replied, she didn’t have updated books. Without them, any decision regarding product lines, pricing, or customer capacity is just a guess!

Guessing is not the way to run a business. On the contrary, every business big and small should have regularly updated bookkeeping and accounting records so business leaders can make the right decision with a foundation in the data. Follow along to learn three big benefits of keeping your bookkeeping and accounting records updated on a regular basis and some tips to get you started with your bookkeeping for your business.

Strategically ladder-up your revenue

As a freelance writer for my primary income, one of my biggest goals is finding the best clients that offer me the most significant return on my time invested. While freelancing is a business that is tough to scale, I like to do something I call “laddering up” my clients where I climb up and add new high-quality clients while letting go lower-quality and lower-paying clients as they are replaced.

This process is great in theory, and most freelancers and business owners understand the concept. But why do they continue to struggle with low-quality clients? Because they don’t look at the numbers and objectively look for ways to bring on better clients and get rid of the bad ones. With no metrics, you might not even know which clients are draining your resources and which lead to the best profitability in your business.

A few months after quitting my job to go full-time online, a look at my own updated bookkeeping records showed that about 76% of my income came from writing while around 15% came from website development and support. That is a clear 80/20 rule example. I cut the 15% of my income that was taking way too much of my time and my total income roughly tripled over the next few months!

Cut under performing products and services

The focus of my conversation with the coaching client focused on turning her services into a product she could sell for a fixed monthly subscription rate. But with no detailed accounting records beyond the reports she gets from her payment processor, she didn’t have any real records to show her income by customer or product. It doesn’t matter if you are a solo freelancer or a business with thousands of employees, you absolutely need this information!

With the right details in hand, you can pick out the one product that sucks away too much of your time for too little money. You can identify expensive recurring tasks you may be able to outsource or eliminate. As you can see from the example above, sometimes cutting underperforming products or services can lead to significant growth.

Success in this area of your business comes down to focus. But without properly updated bookkeeping and accounting records, you don’t know where to focus. You might be wasting hours and have no idea because you don’t have the data. End that big mistake right away. Get those accounting books together and keep them updated, at least monthly, so you can make the best management decisions.

Save time and money at tax time

If increasing revenues and cutting costs were not enough motivation to keep your books updated, here is one last lynchpin: your taxes. You have to do taxes if you have a business. That is not optional. What is optional is making it a stressful period by ignoring your accounting throughout the year and rushing to get it all done in April before the deadline.

Instead of this method, plan and keep your books updated at least once every month. I go a little over what most people need and update my accounting records weekly. But whatever you do, quarterly should be the bare minimum for bookkeeping updates for tax purposes.

While most individuals have to file and pay taxes once every year, most business owners and many side hustlers have to pay quarterly estimated taxes. While you can file and pay based on last year’s tax rates, keeping your books updated can help you get a better estimate if you need to pay more quarterly to avoid the big one-time lump payment in April.

If you have your bookkeeping updated, you just have to print out a P&L and balance sheet and can finish your taxes from there. No other prep needed!

Don’t ignore updated bookkeeping and accounting needs!

If you find the idea of accounting and bookkeeping intimidating, you can always hire an expert to handle it for you. We can help, give us a call at 714-400-9201.

However you decide to do your bookkeeping is great as long as you stick with it! If you don’t, you’ll quickly find yourself behind and with useless financial reports. With the right focus on your books, you have the right information to put your business on track to thrive for years to come.

Six Ways Outsourced Bookkeeping Can Save Your Small Business $$

Six Ways Outsourced Bookkeeping Can Save Your Small Business $$

80% of business owners, who use outsourced bookkeeping, say they can spend more time on their businesses. Now, you no longer need to worry about doing your bookkeeping. You can have outsource bookkeeper do the job for you.

With bookkeeping out of the way, you can focus on what matters most to you, your business. Below we will review some of the ways that hiring an outsourced bookkeeper can save you money.

Outsourced Bookkeeping Is Quick and Efficient
You or your employees may not know what they are doing when it comes to bookkeeping. You’ll be wasting a lot of time working on your books when you should be focusing on what you’re truly good at. That could be running your establishment or your employees doing the main tasks of their job.

When you outsource this position, it will reduce the amount of time that will be spent on bookkeeping. An SME will have the bookkeeping done quickly. They will be familiar with what needs to get done and how it needs to get done.

On top of that, you’ll avoid paying any penalty fees as your books will be done on time every time.

Moreover, this saves you money as it will give you and your employees more time to focus on your business. You won’t be hiring your employees on for longer hours. You’ll be hiring someone else to do this job for you at a cheaper rate.

No More Errors
When you hire an outsourced bookkeeper you won’t have to worry about errors in the books. If something is miscalculated you could spend a lot of time fixing a simple mistake.

Then again, maybe some items didn’t get logged, this will show discrepancies in your books. Discrepancies can lead to fines which will cost you more money down the line.

Moreover, with an outsourced bookkeeper, they will know all the standard regulations (GAAP). They will adhere to these regulations. SMEs will know what they are doing so you can breath easier.

Outsourcing Increases Productivity
When you or your employees don’t have to focus on bookkeeping, more time spent can be spent on your business. It is one less distraction from the main duties and tasks that need to be done.

When there are more tasks to be done it can feel overwhelming. You or your employees can become overworked and fatigued. This means no one will be fully engaged in the duties that matter and they may make more mistakes.

Only Pay for What You Need
If you choose to hire an outsourced bookkeeper, you won’t have to pay part-time or full-time wages. What’s more, you won’t have to worry about providing them with benefits.

On top of that, there are a plethora of payment options that you can choose from. For example, you can pay a fixed rate or an hourly fee.

When you use an outsourced vs an in-house bookkeeper you can choose how often you use the service. You don’t need to keep someone on staff at all times.

Fewer Expenses
With an outsourced bookkeeper, you don’t need more office space or computer equipment. You don’t need to buy any of the accounting software that would be required to do the expenses.

Many firms even use cloud-based accounting software. This allows you to easily view your financial information.

Customize the Services You Receive
There are different services you can choose from when you outsource your bookkeeping. You only pay for the services you want and nothing more.

For example, you can hire someone to work on your income statements and balance sheets. At the same time, if you don’t want them to work on your cash flow management, you can opt-out of that service.

Is Outsourcing Right for You?
If any of these benefits appeal to you, outsourcing may be right for you. Outsourced bookkeepers will keep your business financially secure and help it thrive. With Alvarez Tax Inc. at your side, you will have better peace of mind.

Reach out to us today if you have any further questions on outsourced bookkeeping.

BOOKKEEPING TIPS THAT WILL MAKE YOU A BETTER BUSINESS OWNER – Tip #4

BOOKKEEPING TIPS THAT WILL MAKE YOU A BETTER BUSINESS OWNER – Tip #4

HIRE A PRO TO HELP YOU

While you can certainly do the day-to-day record keeping for your business, It’s highly encouraged you to entrust a professional for the final cut before sending over your information to the IRS.

This provides you with four key benefits:

  1. Ensures that your records are double checked by a numbers professional.
  2. Puts your mind at ease that you are running your business the way you should.
  3. Helps you in the long run by getting all the latest tax breaks, credits, and write-offs appropriate for your business. Tax laws are always changing, so it can be a lot to keep up with if you don’t hire a professional to help you.
  4. Makes you less susceptible to a tax audit. When the IRS views your tax returns and notes that it was filed by a professional, it will have a lesser chance of being flagged for an audit.

NOW THAT YOU KNOW JUST HOW SIMPLE IT CAN BE, HOW WILL THESE IDEAS HELP YOU IN YOUR BUSINESS?! LEAVE A COMMENT BELOW AND LET’S CHAT ABOUT IT!

#bookkeeping #accounting #finances #payroll #quickbooks #income #business #orangecountyca #santa ana #tustin #bookkeepingsantaana #bookkeepingoc

Bookkeeping Tip: Don’t Buy a Car Without Doing These Five Steps

Bookkeeping Tip: Don’t Buy a Car Without Doing These Five Steps

1. Research, Research.

Sure, the commercials tell you what a car is offered for. They don’t tell you what you should really pay. Bring these items to the dealership to get the most bang for your buck:

  • Printouts on the true market value of the car from Kelley Blue Book, and Edmunds.com
  • All the information from the dealer’s website on rates, incentives, rebates, and special finance deals.
  • All the information from the competition’s website on rates, incentives, rebates, and special finance deals.
  • Information on your trade in vehicles title, loan, value, etc (if you have one).
  • Information on you such as your credit score, banking info, and anything else that can help you get the dealer to give you competitive financing.

2. Check Out the Car

You probably know which vehicle on the lot is your preferred, but have a back up or two. Do a walk around when brought to the vehicle. Check for damage, dings, dents, etc. Your salesperson may ask for a credit check before the test drive. Tell them you are pre-approved, as this just adds time and effort to your purchase time. You will be asked for your driver’s license. Don’t be afraid to ask questions on the features of the car before getting in.

3. Test Drive Wisely

Follow these tips to get the most out of your test drive:

  1. Insist on test driving the car for at least 15 minutes.
  2. Don’t let the salesperson distract you if you are listening to the car or otherwise focused.
  3. Take a route that allows you to speed up, brake, take tight corners, and even rough street ways.
  4. You can test the radio for a few moments. Turn it off when satisfied. The noise can be distracting.
  5. Test all the instruments to see if they work.

4. Negotiate Like a Boss

Sales people will often as you to “make the opening bid.” Don’t fall for that. Ask for their best price up front. They will show you a document that outlines all the details on the car. Use your handouts from previous research to compare. Be prepared to walk away should the salesperson not meet or beat the prices. You may love the price and the car. Don’t buy until you’ve shopped at least two more times. Be sure to use this dealer’s numbers when visiting the next.

5. It’s Not Over Until You Sign

You have shopped around. You’ve found a car you like. You’re ready to sign. Now it’s time to face off with the dealer’s finance office. This person will attempt to sell you all types of extras from warranties to paint protection. Feel free to say no to these. They will push for the extended warranty, to which you should let them know you don’t intend to keep the car that long – even if you do. It is essential you ensure the numbers in the sales contract match the agreed-upon price you agreed to earlier. Get any needed repairs, upgrades, detailing, etc in writing before signing.

Congratulations: you are now ready for your new car! Come by and show us your new car.

Entrepreneurs, Here are Business Tips You Should Know

Entrepreneurs, Here are Business Tips You Should Know

Entrepreneurs, Here are Business Tips You Should Know

1. Always ensure that you have enough money in the bank.

2. Get rid of bad employees before they do more damage.

3. Troubleshoot your own managerial style.

4. Take care of your star employees.

As an entrepreneur, its highly important for you to know the ins and outs of your business. The more concepts and strategies you are able to apply to your brand, the higher your chances for success will be.

#businesstips #bookkeepingtips #bookkeepingsantaana #bookkeepingorangecounty