Month: January 2020

The Importance Of Bookkeeping

payroll services minnesota

payroll services minnesotaReliable financial records are essential, which is why bookkeeping is so crucial. Unfortunately, there are a lot of businesses out there that don’t make bookkeeping a priority. Accurate records won’t just make your life easier. Bookkeeping is also a legal requirement.

There are many businesses that fail because of poor bookkeeping. After all, when you’re not keeping proper records, you don’t have the information you need to make your business successful.

1. Proper Budgeting: You need accurate books in order to set a fair budget. When you’re able to keep track of both your expenses and your income, you’ll be able to plan ahead. You’ll be able to make sure you have the money you need to cover all of your expenses.

2. Preparing For Taxes: It’s likely that your business files taxes annually. You shouldn’t have to dig through your desk in order to find the paperwork you need for your taxes. You can avoid these kinds of headaches if you make bookkeeping a priority. With accurate records, tax filing will be much easier. It will also simplify things for you when it comes time for you to file your own tax return.

3. Staying Organized: Organization is something that business owners should prioritize. When you need to locate an essential piece of information about your business, you should be able to do that with ease. At some point, certain parties might request financial records from you, including potential investors, lenders, your employers, and the IRS. You need to make sure that you can quickly provide this information when it’s requested.

4. Accurate Analysis: It’s important to analyze your business’ performance from time to time. Bookkeeping can help you to do exactly that. Through bookkeeping, you’ll be able to generate financial statements that you can use for the purposes of analysis. Analyzing financial statements will allow you to see the cash that’s coming into your business as well as the cash that’s coming out.

5. Improved Decision Making: When you have the data needed to properly analyze your business, you can make smarter decisions. It can be difficult to make the right decisions when you can’t access the information that you need. You can get essential information from bookkeeping. You won’t be able to make decisions that will benefit your business without looking at your financial records.

6. Planning Ahead: With bookkeeping, you’ll be able to look at how your business has performed in the past. This will make it easier for you to prepare for the future. By consulting your financial records, you’ll be able to see where your business is succeeding and failing.

7. Reporting To Investors: Anyone that has invested in your business will want to know how it is performing. You can provide investors with this information when you have accurate financial statements. Documents like your balance sheet, cash flow statements, and income statements all help to demonstrate your business’ value.

8. Managing Finances: It’s difficult to control a company’s finances without proper bookkeeping. Financial records allow you to see how and where your money is being sent. You’ll be able to see what your customers owe you and what you owe to other people. Paying your bills in a timely manner is important to the health of your business. It’s also important to make sure you receive prompt payment for the products or services you provide. Your business depends on having balanced books.

9. Minimizing Stress: When you know your financial records are a mess, you might want to panic. If you’re lying awake at night worrying about your books, you need to take action. Running a business is hard work. You should minimize your stress by keeping accurate, well-organized financial records that can be reviewed at any time.

10. Keep Track Of Profits: Without financial records, it can be difficult to assess how profitable your business truly is. After all, you’ll prepare your income statement via bookkeeping. That statement will allow you to see whether or not your business is turning a profit. When you don’t have access to information like this, you won’t know if your business is succeeding or failing. Your financial records will also help you to see how your business is growing.

11. Improved Cash Flow: Many people don’t realize that keeping accurate books can lead to more reliable cash flow. When you’re not properly tracking customer invoices, you may not notice when you don’t receive an owed payment on time. It’s important that everything, from your business expenses and liabilities to revenues and receivable are recorded. You should keep close track of invoices and ensure you’re receiving payments promptly. You should also make sure you’re paying invoices on time so that you won’t have to pay for late fees.

12. Improved Strategy: As a business owner, you should constantly be strategizing. You need to think tactically so that you’re able to build your business into something bigger and better. You can gather information from your financial records and use it to build stronger strategies. You can also see how well your current strategies are paying off. You’ll be able to adjust your methods and set more realistic goals.

13. Assess Your Business At A Glance: With accurate bookkeeping, you’ll be able to find a lot of essential information about your company. Your income statement, cash flow statement, and balance statement will all allow you to see how your business performed during that period of time. You can go over these statements and quickly assess how your business is doing.

14. You’ll Be Prepared For Auditing: If your business undergoes an IRS audit, you’ll want your books to be well organized. If your books are poorly organized, the process could drag out for a long time. The IRS could also impose fees or other penalties on you

15. Bookkeeping Is A Legal Requirement: It’s important to remember that you’re required by law to maintain accurate financial records of your business. If you don’t do this, your business can be terminated. You may also need to keep records showing that your financial records and personal expenses are separate.

Your Next Step: Now that you understand how essential bookkeeping is, it’s time to take action. With accurate financial records, you can cut costs, avoid major setbacks, and keep your business running smoothly. If you need bookkeeping assistance, don’t hesitate to reach out to us.

Various Functions Of Payroll Management

Quickbooks Training

Quickbooks TrainingPayroll is an extremely important function of any business – whether you have one employee or an entire workforce. But payroll is a complicated process and involves much more than simply ensuring that each employee is paid on time. Payroll management involves various functions to ensure employees are paid correctly in compliance with government regulations.

1. Processing Paychecks

Processing paychecks is the primary function of payroll management. Make the smallest error in one paycheck and it will quickly become apparent just how negatively this can affect the entire workforce and operation of a business. A payroll manager therefore needs to ensure that each employee’s compensation is calculated correctly in accordance with their employment contract.

Aspects of compensation that need to be verified include:

– The net salary of an employee.
– Their hourly work rate.
– Compensation for overtime
– Commission
– Incentives
– Any other amount that is a form of income

Additional factors that need to be taken into account include:

– Vacation time
– Sick leave
– Maternity leave
– Compassionate leave
– Holiday pay

Common deductions that need to be factored in include”

– Federal income tax
– Health or dental insurance contributions.
– Pension fund contributions
– Repayment of a company loan
– Any other deductions or contributions that have been agreed upon between employer and employee.

Additional Bonuses And Perks

– A car allowance
– Housing allowance
– Mobile phone allowance
– Clothing allowance
– Entertainment allowance
– Any other perk or added incentive offered to the employee by the company.

2. Payroll Taxes

It’s not just your employees who are going to be seriously unhappy when your payroll is not processed correctly. The IRS receives 70% of its annual revenue from payroll taxes. Your company can face severe penalties that could be very costly for failure to pay payroll taxes or by paying erroneous taxes. The IRS penalizes businesses with billions of dollars every year.

A payroll manager needs to be aware of the different tax rates that apply to different regions in the country and make the correct deductions from an employee’s income. They also need to fill in various forms to record and document payroll taxes including W-2’s for every employee by the end of January each year. Form 941 also needs to be completed and submitted every quarter detailing employment taxes that are withheld for contributions. These documents need to be completed accurately and on time to avoid penalties. Training, skills and experience are therefore critical in a payroll manager.

3. Record Keeping

The Fair Labor Act requires that an employer keep accurate records for each employee that is not exempt. The following information in employee and payroll records are required:

– Full name and surname of employee and social security number
– Physical or residential address including the zip code
– Date of birth for employees under the age of 19 years
– Gender and occupation
– The day of the week and time when an employee’s work week starts
– The hours that are worked every day
– Total work hours that are completed each workweek
– Rate at which the employee is paid – hourly, daily, weekly or monthly including the amount.
– The regular pay rate per hour
– The total weekly or daily straight-time earnings.
– The total overtime income for each workweek.
– All deductions from and additions to employee’s wages or income.
– The total wages that are paid over each pay period.
– The date when payment is made and the pay period that is covered by that payment.

The FLSA regulations also require that all payroll records should be kept for a period of at least three years. Records showing wage calculations need to be held for two years – for example, work timetables, time cards and other relevant documents. The payroll manager should ensure that these documents are stored electronically and backed up to be inspected by the Department of Labor at any time.

4. Employee Accessibility

While it is a legal requirement for payroll records to be made available to the DOL, employees should also be granted access to their personal payroll information upon request. A secure online portal provides a means for employees to access their personal information including:

– Summary of benefits
– Summary of pension fund or 401(k)
– Summary of deductions and history
– Details of direct payments
– Time clocks
– Paid leave or time off work

UptoDate Bookkeeping solutions also provides employees with the ability to download and print documents such as W-2s, make changes to tax settings and make online payroll inquiries. This empowers your employees with the knowledge that they need when tax season arrives.

5. Simplifying Payroll Management

Payroll is complicated and a dedicated HR department to handle all the responsibilities that come with payroll simply isn’t in the budget for every company. Outsourcing payroll management and administration with UptoDate Bookkeeping is a convenient and affordable solution to provide business owners with the peace of mind that every aspect of their payroll is being handled expertly and in compliance with the required regulations.