Author: udtadmin

‘Robo-Advisors’ Can Help You Invest

Posted on March 26, 2023 by udtadmin - Bookkeeping Services

Advancing technology has revolutionized the way people handle their finances, providing an invaluable resource for those who haven’t traditionally had access to professional money management. Robo-advisors are quickly becoming a go-to service among major financial institutions by offering users automated advice and strategies without judgment — all at much more economical costs than human advisors. But with so many options out there, how do you know which robo-advisor is right for you? To assist in making that decision we consulted experts on what questions should be asked during your search process.

What are the fees?

With Robo-advisors, the doors of financial advice are now open to anyone who meets their low minimums and fees. Gone is the days when one percent was a necessity for access; two popular companies charge an annual 0.25% fee with no opening charges included! Now you can take control of your finances without breaking bank – how revolutionary!

How rich do you need to be?

Investing your money can be intimidating, especially if you don’t have a large sum to get started. Thankfully there are now several options that make managing finances more accessible with minimums as low as $0 or even just $500. Before getting started though, consider making sure you have at least an emergency fund of $500 in place, so you’re prepared for unexpected costs first and foremost!

What about the cost of the specific investment funds?

Investing with a robo-adviser is an attractive option for many investors, but the associated management fees can have a negative impact on your overall returns. Be sure to consider these additional costs when deciding whether or not this route works best for you; if in doubt, contact the customer service team of your chosen platform who will be able to provide further information about any hidden charges that may apply.

What kind of investing specialties are available?

Investors seeking to capitalize on unique events should consider a robo-advisor. These advisors analyze an investor’s specific goals, from retirement and college savings plans, with the intention of finding maximum tax advantages for each situation.

Is there tax-loss harvesting?

When investing in a new enterprise, it’s important to be mindful of Uncle Sam. Tax-loss harvesting can help reduce capital gains tax bills and is an invaluable tool for those with taxable accounts – though not applicable if you’re only looking at retirement or college savings vehicles.

What’s the tailored plan for you, and how does it compare to competitors?

Investing can be daunting and complex, but with the right plan tailored to your individual needs it doesn’t have to be. Robo-advisors offer an easy way for you to get started – by assessing your specific goals and investment risk appetite, they’re able create a custom portfolio that will help maximize future returns on investments while minimizing risks taken. Don’t settle if this initial plan is not something you feel comfortable investing in; many robo- advisors provide options for further customization of portfolios. As part of due diligence when making such important decisions about savings and finances, explore different offerings from various providers so as best meet all financial objectives.

How has the robot performed?

With a volatile and ever-changing market landscape, building an investment portfolio that stands the test of time is essential. Traditional advisory services have been able to weather storms in the past – but recent research suggests robo advisors can offer exceptional performance for longer period when compared side by side.

How messy is your financial picture?

Robo-advisors offer an economical, automated solution for those looking to secure a sound financial future. However, it is not recommended if you have more complicated needs or require comprehensive advice beyond investing such as assistance with insurance and estate planning – these are best handled by professional advisors who can provide tailored support. Nonetheless, robo-advisors remain a viable option that many newer investors should consider when making investments decisions in their long-term wealth management goals.

Can you talk a human?

Investing doesn’t have to be a daunting task, especially with the combination of robo-advisory and financial expert services. Younger generations may shy away from human interaction in their investments, but when included as an option for those who are less comfortable relying solely on AI algorithms it can provide great benefits. With added fees that grant access to personalized advice alongside standard customer service options you’ll get peace of mind without compromising automated accuracy – proving there’s more than one-way investors can achieve success!

How scared of investing are you?

As an investor, it is integral you can ride out market volatility and staying in the game for long-term growth. When considering a robo-advisor to manage your investments, ask yourself if you can go without handholding during times of uncertainty – as markets have already been exhibiting recently. Withdrawing funds at any early sign may mean missing out on potential gains over time; so ensure that this type of independent investment journey aligns with your personal resilience and goals before taking the leap!

A Guide to Finance and Taxes for Seniors

Posted on March 23, 2023 by udtadmin - Bookkeeping Services

As we mature, our financial needs and spending habits evolve simply as a matter of course. But having to live on a fixed income can be intimidating, making it vital for older adults to stay informed about how they can ensure their money is working hard too – from utilizing senior discounts and tax credits/deductions available to them, right through to building retirement portfolios that sustain long-term security in later life. This guide provides comprehensive advice around this topic, so you feel more financially prepared now – and secure your future with peace of mind!

Financial Planning Resources

With so much to consider, savvy financial planning can be the key difference between worry-free retirement and a struggle for everyday expenses. To maximize your long-term potential, it’s important to stay current on Social Security benefits that you qualify for as well as tax credits & deductions available in order to minimize costs wherever possible.

Trusts, Wills, and Estate Planning Resources

Having a trust, will and estate plan in place can give you peace of mind that your family is cared for- no matter what life throws their way. It’s the smart move to make today so your loved ones are secure tomorrow.

Social Security

More than 65 million Americans count on Social Security each year to supplement their retirement income. But is this enough? While it can be a great resource, financial experts advise that relying solely on Social Security benefits could lead to “big sticker shocks” during your golden years. To ensure you are financially safe and secure in the future, there are several strategies for understanding how exactly Social Security fits into overall savings and investment goals – join us as we dive deeper into these options!

Know Your Social Security Benefit Options

For married couples, widows/widowers, and former spouses, it’s important to note there are special considerations that can drastically affect Social Security benefits. It is essential for you and your family to gain an understanding of all the benefit options available, such as: survivor’s insurance; retirement income; spousal benefits; dependents’ benefits – so everyone has access to a secure financial future!

Social Security spousal benefits
Divorced spouse Social Security benefits
Social Security survivor’s benefits
Social Security Disability Insurance (SSDI) benefits

Tax Credits and Deductions for Seniors

As seniors, you may experience an increase in health and medical needs throughout your golden years. While this can be costly on its own, the tax burden that comes along with these expenses doesn’t make it any easier. To help ease the financial strain of being a senior citizen, take advantage of all applicable credits or deductions available to relieve some of that additional expense!

Health Care Tax Deductions

It may pay to take a closer look: if you itemize healthcare deductions, the IRS allows for potential tax credits and/or deductions on medical or dental costs incurred by yourself, your spouse, and dependents. Give yourself the benefit of financially-sound advice before filing this year’s taxes – it could save you money!

Tax Credits

Health care credits
Family and dependent credits
Income and savings credits
Homeowner credits
Education credits

Tax Deductions

Health care deductions
Investment-related deductions
Work-related deductions
Itemized deductions
Education deductions

For senior citizens living on a budget, there may be options to drastically reduce or even eliminate your yearly tax burden. Don’t miss out – check today and find the relief you deserve!

How to Improve Your Payroll Process

Posted on March 20, 2023 by udtadmin - Payroll Services

Many businesses have experienced difficulties with their payroll processes, from lateness to mistakes and complexity. Such errors can hinder employees’ satisfaction and put companies at risk of costly financial penalties – potentially disrupting employer/employee relations in the long run. To help combat these issues, we’ve created a list of recommended best practices for an optimal payroll process!

How to Improve Your Payroll Process:

Create and maintain a monthly payroll schedule.

To keep operations running smoothly, we recommend establishing a synchronization of your payroll periods. An orderly cycle will streamline compensation and decrease risk for any errors that could occur from multi-timespan processing. Utilizing an Excel calendar with saved dates is an efficient way to set up recurring payments – just be sure to make room for potential delays in the process!

Establishing a reliable payroll schedule is an important step in creating structural certainty and efficiency. Make sure to communicate the finalized calendar to all those involved with processing, so that everyone’s expectations are aligned for timely payments.

State Mandated Payroll Schedules

Keeping track of payments to your employees can be a tricky task. Depending on where you operate, certain regulations may require businesses to follow state-mandated payment schedules. To find out if this applies to your business, consult the U.S Department of Labor website for more information!

Study tax requirements.

To ensure your business is compliant with all relevant regulations, it’s critical to be informed about the ever-evolving payroll laws of both state and federal governments. Appoint a team member who can carry out regular research on this topic and ensure any updates are correctly applied across all related processes within the company. Additionally, staying abreast of deadlines for tax filings or reporting requirements could spare you from costly penalties due to non-compliance.

Areas of emphasis include:

Remittance.
Payroll deductions.
Pension contributions.
Employee insurance.
Bonuses and salary increases.

For any organization to manage their payroll effectively and efficiently, it’s paramount that both management and HR are fully versed on all relevant obligations.

Payroll Taxes

Understand the importance of taxes in payroll and explore user-friendly resources to calculate Federal Income Tax, FICA, FUTA amongst other taxable deductions – with easy guides on when they’re due.

Create clear and simple payroll policies.

Payroll mistakes cause problems for everyone and can easily be prevented with strategic policy implementation. Comprehensive training and clear, easy-to-follow payroll policies enable employees to understand their wages accurately while also protecting companies from costly errors such as underpaid taxes or misclassifications – which could result in penalties.

Your policy should include:

A complete overview of how the payroll process works.
Employee classifications (full time, part-time, contractors).
Employee reporting requirements.
How salaries are set and calculated.
How promotions and benefits are calculated and processed.
How the company handles payroll errors.

To ensure employees are confident in their understanding of workplace policies, all relevant information should be made readily available. Encouraging questions from staff members is also recommended if any confusion arises regarding the policy to provide clear direction for a successful business environment.

Our Recommendation:

Get your employees involved in improving workplace policies! Take the initiative to host regular staff meetings where you’ll be able to discuss necessary changes and introduce new policies. Utilize these opportunities to distribute surveys, do presentations, and solicit ideas from team members that could help refine policy approaches even further.

Conduct periodic audits.

To optimize existing payroll systems, conducting a detailed workflow analysis is essential. This will identify recurring mistakes and allow you to track their progress over time with regular audits – leading your business towards more efficient operations in the long-term.

Your audit should include:

The monitoring of all payroll processes.
The testing of payroll software, including integrations, updates, and feature add-ons.
Training programs.
The implementation of time and attendance software.

Invest in payroll software.

Outdated payroll processes can result in costly mistakes for businesses. To keep up with modern times, investing in updated software could be a great solution! Not only does it reduce admin time but also offers features like integrated time and attendance as well as direct payments to support tax compliance. Keep in mind that additional training may be needed before implementation – so prepare yourself accordingly when considering installation of such solutions.

Ensure your employees have seamless online access with the help of payroll software. The platform grants round-the-clock power to view digital paystubs, track hours worked, and vacation days used, as well as monitor available sick time – empowering them like never before!

Implement direct deposits.

Employers can save time and money by eliminating the traditional paper check process and directly depositing salaries into employees’ bank accounts. Going digital ensures more accurate payment delivery with fewer risks, so businesses no longer have to worry about costly administrative tasks associated with manual processes.

Outsource your payroll.

When it comes to managing your business’ payroll, taking the time and effort to do the associated tasks can be daunting. For companies of any size looking for a streamlined solution without sacrificing accuracy or data integrity, outsourcing is increasingly becoming an attractive option. UptoDate Bookkeeping has specialized expertise in bookkeeping and accounting processes –you can rest assured that all facets of your salary management are handled effectively.

How Often Are Small Businesses Audited?

Posted on March 17, 2023 by udtadmin - Tax Audits

Small businesses can be subject to audits randomly, but the IRS usually pays closer attention when specific red flags appear. Unfortunately, many owners don’t know these audit triggers and may struggle with preventing them. To provide guidance for entrepreneurs we’re breaking down how often small businesses are audited and what alerts the IRS – helping business owners stay prepared in any circumstance.

Common IRS Red Flags

Be Wary of Entertainment Spending

Though there are still deductions available for meals with potential or current clients, care should be taken when claiming other entertainment expenses. As the government eliminated business-related deduction allowances in 2017, all costs associated with such activities will have to come out of pocket. However, if you are present at a client meal and order reasonably priced food and beverages – 50% may potentially qualify as deductible. It’s wise to tread carefully when it comes to leisure events involving your business contacts lest an audit ensues!

Be Careful with Deductions

Business owners invest a substantial amount of time and effort into their companies to ensure success, so they should certainly take advantage of all applicable deductions. However, when it comes to accessing these benefits, caution is key. The IRS employs Discriminate Income Function screening – if your business makes significantly more deductions than those in the same industry typically do, you may be subject to an inquiry from the agency itself!

It’s easy to become tempted by the potential savings when it comes to miscellaneous deductions. But be warned that careless decision-making in this area could come with serious IRS consequences! To stay on the safe side, always make sure your business expenses are ordinary and necessary for your industry—particularly vehicle mileage or travel related costs which often face extra scrutiny from tax authorities. If you’re new to managing a small organization, expert financial advice is indispensable – don’t hesitate to seek out help so you can get off on the right foot as far as taxes go.

Always File on Time

The IRS is always keeping an eye out for any inconsistencies that could indicate a potential issue with your business taxes. Don’t take the risk of their unwanted scrutiny and ensure you file on time – whether electronically or via paper! To avoid exception, start filing now to guarantee timely compliance and prevent those costly penalty fees. If delays occur unexpectedly, be sure to request an extension before it’s too late and keep electronic filing in mind as it reduces errors significantly.

Consider Incorporating

With increased accountability and professional competence, small businesses that incorporate often find themselves less likely to be audited by the IRS than Schedule C income tax filers who are self-employed. According to one reliable legal source, this is because incorporation can demonstrate a higher level of financial responsibility which helps reduce suspicion for underreported incomes or unearned deductions – an issue frequently associated with smaller operations.

Financially savvy business owners and entrepreneurs are turning to corporations or LLCs for multiple advantages. Aside from reducing the risk of audit, incorporation delivers substantial tax benefits and safeguards personal assets while enhancing eligibility for loans. Incorporating is an ideal strategy if you value financial security – so why wait?

Be Cautious of Sudden Charity

Donating to charity is a great way of giving back, but if you give too much at once the IRS may become suspicious. Gradual donations spread over time are more likely to be taken as genuine support rather than tax evasion strategies–plus it gives your charitable cause benefits that last!

If Paying in Cash, Record Every Transaction in Detail

Companies engaging in cash transactions, such as purchasing large items like vehicles and equipment, should keep careful records to ensure they are up-to-date. Consider using a business credit or debit card instead for easier record keeping – not only can you track your expenses more accurately, but it could save time during the filing process if ever required by authorities.

Always Report ALL Taxable Income

Keeping accurate records of income is a key component to any successful business, and the IRS has high expectations when it comes time to file taxes. Make sure each taxable dollar earned in the US during tax season is properly reported; not doing so can easily lead to an audit should suspicion arise. Furthermore, businesses utilizing digital currency may be subject to even more intense scrutiny by government agencies – think carefully before incorporating such into your operations!

Provide Reasonable Salaries

As a small business owner, maintaining reasonable employee salaries is key. The IRS pays particular attention to overly large remuneration for shareholders and executives alike; accordingly, with enlarged incomes comes amplified audit risk – something that must be taken into careful consideration when navigating salary decisions.

UptoDate Bookkeeping

At UptoDate Bookkeeping, we are dedicated to equipping small businesses with the tools they need for success. Our team of experienced professionals use their knowledge and skill to provide tailored solutions that guarantee accurate records and balanced accounts every time. Get started on your business growth journey today by scheduling a call or chat session with one of our bookkeeping experts!

Measuring Employee Performance with HR Tech

Posted on March 14, 2023 by udtadmin - HR Tools

Performance reviews play a critical role in today’s businesses by providing an objective look at how employees measure up to organizational objectives and strategies. Automated solutions are becoming increasingly popular as they make it simpler for managers and HR teams to tackle time-intensive tasks while being able to concentrate on processes that need improvement or innovation. However, these tools should only be adopted considering the specific needs of the business – otherwise, their use may prove counterproductive!

Technology integration has revolutionized the way employers’ access, analyze, and assess data to support their organizational strategies. By employing compulsory modules that seamlessly work with a variety of apps, systems and ERPs, decision-makers can quickly make informed choices based on evidence — thus allowing employees to benefit from better communication flow as well as improved leadership decisions.

Why Measure Employee Performance?

Organizations can utilize automated technology to incorporate multiple components of performance management and create a unified system. This enables smoother flow of data related to talent managing, such as application tracking statuses, onboarding processes, trainings programs etc., while also providing an early warning in case any issues arise enabling preemptive actions that make sure your best talents stay on board and everything remains compliant with the reporting regulations.

Leaders must be aware of what data is being tracked and why, as it’s essential for effective communication. Managers can gather a variety of types of reviews from employees during each cycle to gain an insightful understanding that helps provide timely feedback. Conversely, HR teams can use these metrics when onboarding new staff by collecting information on the skills they would bring aboard; this ensures the organization has all necessary skill sets covered!

Using HR Tech to Enhance Employee Performance

Organizations are no longer content with their stagnant performance management processes – they need to move forward and make the most of modern HR technology. This cutting-edge tech offers valuable rewards for employees and employers alike, but there is still more potential to explore!

Increased Collaboration and Accountability

HR tools are an invaluable asset for aligning team objectives and ensuring the success of all entities involved. By providing a systemic feedback loop between employees, managers, and established goals, companies can avoid tedious manual inputs like checking calendars to prioritize tasks. This allows leaders to focus on their responsibilities while also intervening whenever needed based off accurate data that measures employee performance at every level – monthly/quarterly/annually – enabling them to provide tailored guidance throughout each cycle.

Easy Access to Essential Data

HR tools provide valuable insights to manage and update employee performance, equipping administrators with the necessary data they need to make informed decisions that can positively shape changes in strategy. Furthermore, these powerful resources help bring boardroom discussion into play and bridge management teams behind agreed-upon objectives.

Identification of Inefficient Processes

As organizations began to recognize the value of HR tech, identifying processes that either positively or negatively affected productivity was a key priority. With advancements in artificial intelligence and machine learning offering further possibility for streamlining these functions, companies can now implement automated modules which track essential data fields and optimize responsibility distribution according to individual strengths. This helps pave the way towards an environment with improved efficiency while eliminating time-consuming manual task.

Attract Better Talent

Organizations that equip their workforce with the latest tools and tech experience improved operations, as well as an enhanced work culture characterized by transparency. As employee efforts are rewarded via reliable data-driven incentives such as higher pay, promotions, recognition, and better benefits – potential candidates will be intrigued to find a workplace where professional growth is both supported and encouraged.

Choosing the right tools

By empowering employees to take control of their careers, HR management tools offer a comprehensive solution for performance management. With real-time feedback mechanisms and automated communications included in the offering, organizations benefit from increased coaching opportunities between managers and team members as well as greater transparency among stakeholders. All these benefits come with improved job satisfaction — leading to more productive teams across departments!

By taking full advantage of modern software integrations, teams can work smarter and more efficiently. Companies may visualize their data to unlock powerful insights across locations and departments that drive real-time decision making based on coming trends. Visual dashboards streamline this process while introducing the added benefit of reducing fear towards numbers for all stakeholders involved in the outcome.

Templates are a powerful tool for stakeholders with the ability to execute, providing them an established starting point instead of beginning from scratch. Teams can easily adjust as necessary while also ensuring their message is customized and consistent across all platforms. Combined with automation capabilities, templates offer efficient communication solutions – such as job postings, mailing out offers letters and organizing welcome packages – that expedite onboarding processes without sacrificing quality or detail.

Conclusion

Unlocking the full potential of an organization’s team can be achieved through HR technologies. These tools enable businesses to foster their talent, strengthen relationships and drive progress with a people-centric approach. With timely data analysis at its core, investing in these strategies delivers real rewards for employers and employees alike.

Benefits of Outsourcing Accounts Receivables

Posted on January 27, 2023 by udtadmin - accounts payable and accounts receivable

Cash flow is the lifeblood of a small business owner.

You rely on the timely payment of invoices to fund your operations, pay your employees and keep the rent paid on the space you occupy.

This makes managing your receivables one of your most important tasks. But you don’t have to do it all alone.

The AR department is responsible for ensuring that billed invoices are collected and attempts to collect them as quickly as possible.

Small business owners have many reasons to outsource their receivables operations.

Streamline Billing and Payment Processes: You have immediate access to automated payment services that are tailored for your company, which will allow you to free up employees.

Lowers Administrative Overhead and Costs: Outsourcing firms will take over the responsibility for hiring, training, and maintaining AR teams.

Gives you Control: You don’t have the time or patience to chase down default payers.

Integrated Collection System: You will gain the experience and expertise necessary to integrate all aspects of your billing and collection processes.

Refocus on the Essentials: Three key elements of business strategy can be emphasized: customer service, marketing, and R&D.

Enhances Customer Interactions

The process is handled by your outsourcing partner, whether it’s a reminder email or dealing directly with a customer who refuses to pay.

Get the Financial Help Your Business Needs with UptoDate Bookkeeping Services

If accounts receivable feels like the last thing you should be spending time on, it’s worth exploring a solution.

UptoDate Bookkeeping is based in Blaine MN and serves the Minneapolis/St. Paul and surrounding areas.

Give us a call today or book an appointment on our website.

Benefits of Outsourcing Accounts Payable

Posted on January 27, 2023 by udtadmin - accounts payable and accounts receivable

These are the reasons why growing companies should outsource their accounts payable department:

Early Payment Discounts:

You can expedite vendor payments and invoices. Multiple payments and missing bills might be avoided if this were to happen.

Cost Reduction:

Outsourcing these services enables a business to transform fixed costs into variable costs, which might help to lower the upfront expenditures.

Lower Errors:

Outsourcing accounts payable can reduce human error by removing human input.Human error can lead to problems such as missed deadlines or incorrect bookkeeping entries.

Enhanced Efficiency and Productivity:

Outsourcing the accounts payable department reduces overhead costs incurred by the company.

Leverage Technology:

One of the best ways to leverage technology is to automate processes, including invoicing, payments, and expense management.

Constant Tracking:

Many accounts payable outsourcing companies employ cutting-edge technology that can be monitored at every stage

Conclusion:

Outsourcing accounts payable functions can save time and costs, allowing the company to focus its resources on other areas.

Get the Financial Help Your Business Needs with UptoDate Bookkeeping Services

If accounts payable feels like the last thing you should be spending time on, it’s worth exploring a solution.

UptoDate Bookkeeping is based in Blaine MN and serves the Minneapolis/St. Paul and surrounding areas.

Give us a call today or book an appointment on our website.

Reasons to Outsource Your Bookkeeping

Posted on January 27, 2023 by udtadmin - Bookkeeping Services

Many small business owners seek out outside help when their business is busy.

Small business owners can save time and money by outsourcing their bookkeeping. Small business owners prefer to outsource their bookkeeping services to professionals rather than doing it themselves.

They can reduce staffing costs and payroll expenses

It is important to take into account the overhead costs associated with this position. You also get insurance, vacation time, bonuses, paid time off and other perks as a result of having employees.

Outsourcing helps you to save costs on hiring full-time or part-time bookkeepers.

You will pay more for insurance, benefits, or training expenses by adding a bookkeeper on your payroll. You only pay for the bookkeeping services you need when you outsource the work.

Get access to a network of experts and other resources.

Outsourcing your bookkeeping means that you get a team of bookkeepers, and managers double-checking each other’s work. This ensures you get the best possible service. This allows you to focus on your business.

Enjoy a stress-free season for tax preparation.

Outsourced bookkeeping companies have tax experts on staff that ensure your processes are tax compliant. These companies guarantee to complete the bookkeeping tasks before the tax season arrives.

Make the most of the latest technology.

You can outsource your bookkeeping and get the best software at a fraction the price. Bookkeeping firms often buy large quantities of software licenses that they then use to service a large number of customers.

Scale your books to your business.

Different businesses require different phasing requirements for bookkeeping. Seasonal changes may occur, such as the addition or removal of product lines or the growth of companies. It can be difficult to determine the size of an internal bookkeeping staff, especially if they are small.

Privacy and confidentiality guaranteed.

Outsourced bookkeepers can help you maintain confidentiality and security of your financial information. You can be sure that your financial data is protected by a bookkeeper who has a thorough knowledge of all the best accounting programs and the latest software features. Outsourcing can reduce internal and external fraud.

Get the Financial Help Your Business Needs with UptoDate Bookkeeping Services

If number crunching feels like the last thing you should be spending time on, it’s worth exploring a solution.

UptoDate Bookkeeping is based in Blaine MN and serves Minneapolis/St. Paul and the surrounding areas.

Give us a call today or book an appointment on our website.

Signs Your Small Business Needs Bookkeeping Services

Posted on January 27, 2023 by udtadmin - Bookkeeping Services

You Have Unpredictable Cash Flow:

Are you ever unable to pay your business expenses in certain months due to a lack of cash?

While many factors can cause this scenario—like insufficient client work, large unforeseen expenses, and late payments from clients—the bottom line is that your expenses have surpassed your income. You have a cash flow problem.

And not keeping tabs on your cash flow is a huge issue. Think of it as steering a ship with no map and no way to navigate. You become vulnerable to the smallest changes around you because you’re unable to catch them in time.

Your books are always out of date:

It is important to keep track of your monthly transactions.

Updated and accurate books can often mean the difference between:

Knowing whether you can pay your employees and contractors for the month
Getting approved or denied for a business loan or line of credit
Bringing on investors or partners for your venture
Knowing if you can sell your business when an opportunity arises

When your books are outdated, you never really have a firm handle on your finances. Tracking and managing your cash flow become difficult. It also becomes nearly impossible to confidently gauge the financial health of your venture or make important business decisions.

You are missing out on Tax deductions:

Tax-deductible business expenses include digital downloads and online subscriptions. Rent for office space is also one example.

But chances are you’ve likely missed a few deductions over the years because you never tracked them. It’s also easy to miss obvious tax write-offs when you’re scrambling to update your books at the last minute.

Thankfully, bookkeepers keep track of all your transactions and assign them to the right expense categories to reduce your total tax bill. They’ll also have a better understanding of which tax deductions your business qualifies for, and may identify business expenses you didn’t even know were tax-deductible.

You Don’t Have Enough Time to Handle Everything:

Growing businesses mean more clients, higher billing volumes and more back-office paperwork.

And as your business grows, your to-do list does too. But there’s only so much work a person can do in a day—and as the person running the show, your time is extremely valuable.

When you’re responsible for your own bookkeeping, you may be removing yourself from more important tasks, such as marketing and client work, that will help grow your business and increase your revenue.

You’re Not Excited About Managing the Books:

Do you regularly put off managing your books for as long as you can?

If you’re not passionate about business finance, we bet you’d much rather reach out to new clients than print out trial balances and income statements. But despite how crucial bookkeeping is to the success of your business, filling your days with tasks you hate is a surefire way to deplete your motivation.

If you don’t have the time, knowledge, or desire to manage your books yourself, there are thousands of professionals out there who’d love to help. Consider outsourcing your basic bookkeeping needs so you can free up your time and head space, rekindle your passion for your work, and reconnect with the reasons you started your business in the first place.

You’re Not Confident in Your Bookkeeping Skills:

A certain amount of knowledge is necessary for your company’s financial security and health.

Without it, you won’t have an accurate picture of where your business is at. And in the worst-case scenarios, you can expect a letter from the IRS notifying you about the exorbitant late fees, interest, and penalties you now owe.

These situations happen more often than you’d expect. So if you have doubts about whether you’re managing your books properly—maybe you’re unsure about the integrity of your financial records—hire a bookkeeper for peace of mind.

You are paying your accountant to do your bookkeeping:

Accounting and bookkeeping are two different things. Bookkeepers keep track of financial transactions while accountants interpret and analyze these financial data.

The problem is, if you’re not regularly updating your books (see point #2), you’ll have to ask your accountant to organize all your financial information ahead of tax season. They’ll need to make the necessary adjustments to your books and assign expense categories to your transactions—all tasks your bookkeeper could’ve done for much less.

If this situation sounds all too familiar, consider hiring a bookkeeper well ahead of tax season for some catch-up bookkeeping (where they get your books up-to-date and organize your past paperwork) and properly maintaining detailed books for your business moving forward.

Get the Financial Help Your Business Needs with UptoDate Bookkeeping Services

If number crunching feels like the last thing you should be spending time on, it’s worth exploring a solution.

UptoDate Bookkeeping is based in Blaine MN and serves the Minneapolis/St. Paul and surrounding areas.

Give us a call today or book an appointment on our website.

Bookkeeping 101: Bookkeeping Basics for Small Businesses

Posted on October 20, 2022 by udtadmin - Bookkeeping Services

Bookkeeping for a small business involves establishing a framework, selecting a method, and keeping track of details. Bookkeeping is a fundamental aspect of business finances and can affect the growth and prosperity of your small business. It encompasses a variety of tasks, ranging from simple data entry in a software platform to working with certified public accountants, and serves as the foundation of your accounting and financial systems.

Accounting fundamentals for small businesses

As bookkeeping and accounting technology has advanced, more bookkeeping tasks have become automated. However, this does not diminish the significance of ensuring everything is set up correctly from the beginning.

Implementing accounting software

Setting up accounting or bookkeeping software entails connecting business bank accounts, entering any required data, and reconciling transactions. It also entails checking for errors, learning your accounting software, and searching for ways to streamline various accounting processes.

Selecting an entrance system

Accounting for small businesses requires you to choose between single- and double-entry systems. Single-entry accounting records each transaction as an expense or an income only once. This method is simple and appropriate for small businesses without significant inventory or equipment. To “balance the books” between accounts, double-entry accounting records each transaction twice, as a debit and a credit. Although more complex, it can prevent errors in transaction recording. The entry system you select affects your financial management and bookkeeping procedures.

Choosing a method of bookkeeping

You must also choose between cash accounting and accrual accounting. Cash accounting records transactions based on the exchange of cash. This method does not record invoices or your business’s unpaid bills until they have been paid in full. These invoices and bills are recorded by accrual-based accounting even if the funds have not been exchanged. Generally, accrual-based accounting is the preferred method, but the choice is ultimately yours.

Managing transactions

Everyday bookkeeping duties include managing transactions. This involves importing and correctly categorizing transactions, reconciling them, and ensuring that they are recorded according to your entry system and accounting method.

Accounting for receivables and payables

Small businesses also manage accounts receivable, ensuring that your company is paid for its products or services. This may involve estimating the final cost of a project, preparing and sending invoices, and providing statements. Accounting for small businesses also entails ensuring that bills and invoices are paid on time, known as accounts payable.

Setting up payroll

Some businesses perform payroll processing within their accounting software, while others use a separate payroll program. Which software you select will determine how you set up and administer payroll.

Coordination with a tax professional

A small business must identify potential tax deductions and streamline its tax procedures to the greatest extent possible. Some accounting software options provide access to tax professionals. If you do not connect with one through a service or software, it is likely that you will need to work with one when filing business taxes.

Managing financial documents and financial statements

Bookkeeping for small businesses also entails the management of essential accounting documents and the maintenance of the data — transactions, assets, income, expenses, etc. — that is used to generate financial statements. There are numerous software options for document storage and streamlining the documentation process.

Why bookkeeping is essential for small businesses

Even though accounting software can simplify bookkeeping processes, it is essential that the bookkeeping for your small business is performed correctly. Listed below are several reasons why bookkeeping is so crucial:

Separating business and personal finances protects you from being held personally liable for any business-related debts or issues.
Identifying errors early by managing transactions and reconciliation prevents future financial problems.
Businesses can save money by streamlining tax processes and collaborating with tax professionals to simplify their finances.
Monitoring the financial health of a business identifies opportunities to improve or alter processes.
Organizing documents and records simplifies tasks such as obtaining a business loan or purchasing new equipment.

How to administer accounting for small businesses

There are three bookkeeping methods for small businesses:

Handle your own small business’s accounting

If you manage your own bookkeeping, you are responsible for keeping your finances in order, storing records, and creating required statements. Using accounting software simplifies many bookkeeping tasks, but you will still need tech-based skills to operate and optimize the software.

Use an online bookkeeping service

This guide on how to find the best virtual bookkeeping service will help you initiate the process of outsourcing your bookkeeping. With this type of service, you can communicate exclusively via phone or email without having to worry about physically meeting.

The duties performed by a service will depend on the provider.

Hire an in-house bookkeeper

You can also directly employ a bookkeeper for your business. Employing a professional on a part-time or full-time basis allows you access to their knowledge and familiarizes them with your company’s finances, processes, and accounting tools and software. It is important to note, however, that your bookkeeper will not be the only individual working on your business’s finances. Therefore, you must understand which tasks your bookkeeper is and is not responsible for.