What Is The First Thing A Small Business Should Outsource?

Everyone has their own opinion on this subject. I certainly have my own but it is a little bias. I was curious to see what everyone's opinion was and so I listed it on a forum. Do you think it is payroll, marketing, human resource, hiring, etc?  Here are some responses I got:




Linda Wall • "Payroll. If you use QuickBooks payroll, Paychex, ADP or any of the many others out there, this is one area you want to get right. Also, the time saving and peace of mind that payroll deposits are made on time".







 Barbara Bublyk •" Personally, after working with a number of small businesses, I strongly urge everystart-up to get COMPETENT bookkeeping help. I've spent a ridiculous number of hours trying to set up systems and straighten out messes that could have been avoided had the owners asked for help from day one".



Amy Trader • "I agree with Barbara, bookkeeping would be the first. I, too, have spent a lot of hours correcting mistakes or having to throw it all out and start over".



Kevin Harris • "Thanks to each of you for your input. I believe bookkeeping is ultra important to get right from the start, for exactly the reasons Barbara and Amy mention. If I had to choose, I'd say payroll is the first thing that I'd recommend small businesses take off their plate. Not only do you get the guarantee on accuracy and timing (as long as it's a reputable payroll service), a better reason is the simple trade-off between a ton of time & energy spent versus a minimal cost".



Catherine Haig • "I agree with bookkeeping and payroll because I've spent countless hours with owners hanging all over my head worrying about their payroll when all they had to do was give it to a competent company and that would NOT be Quickbooks payroll which, imo, IS THE WORST EVER! "


Stephanie Wells •"Ditto the bookkeeping. And unless the business is IT related, anything and EVERYTHING to do with setting up and maintaining computers, networks and peripherals".



Linda Morgan •"Definetly the bookkeeping and payroll. After these two I would add the record keeping. Hopefully if the bookkeeping is outsourced the bookkeeper is attending to the record keeping. New and stringent rules regardine retention are coming down in the next couple of years and businesses need to be prepared".


Demos Loizides •"You gotta love the small businesses that give important functions, such as bookkeeping and payroll in to inexperienced and apathetic employees. Their screw ups keep us busy".



Meghan Blair-Valero •"I am always amazed by what people decide to cheap out on. The amount of money they end up paying the IRS or the accountant because they decided to let the secretary be the bookkeeper. - often wonder if they even asked the person that they have largely left in charge of there business finances if they have ever balance their own checking accounts? I charge a premium when cleaning up someone elses mess".



Demos Loizides • "Since I'm hourly, I don't need a premium for cleaning up messes. They take longer than routine maintenance jobs, so I earn more anyway".

I personally can relate to this last one.  I recently acquired a client that has been merrily going about posting there business expenses, etc in QuickBooks.  When I looked at their check register nothing was classified, all put into accounts payablenot into business expenses, payroll, donations, etc.  This entire year has to be gone through again to get ready for tax time and this will take hours.

I can help give you peace of mind with your bookkeeping for as little as $75.00 per month but when we're talking about re-constructing an entire year of business.......

Call now for a FREE consultation and estimate (562) 420-0043

http://www.checkedandbalancedaccounting.com/

Does Your Small Business Have It's Bookkeeping House In Order?

Even though it might not be the most glamorous aspect of running a business, bookkeeping should always be near the top of your to-do list. The very life of your business depends on your diligence in this area.


Every business, regardless of size, has to keep a detailed record of its financial activities in order to comply with the tax laws. The activity of making and maintaining these records is known as bookkeeping.

For small businesses, accurate and diligent bookkeeping is necessary. It not only establishes compliance with a number of IRS regulations and bank lending rules but also improves your ability to make operational decisions.


So where do you start? Here are a few basics to keep in mind when setting up a bookkeeping system. Follow this advice, and the numbers will work for you, rather than the other way around.

1. Choose a bookkeeping system.


There are two varieties of bookkeeping: single-entry and double-entry. Single-entry bookkeeping is a rudimentary system suitable for personal finance. Balancing your checkbook is an example of single-entry bookkeeping, as it involves a single account (checking) that is being debited and credited. Double-entry bookkeeping is more appropriate for business, as it tracks two accounts at a time. Say you sell a product: Double-entry bookkeeping records the transaction as a credit in your cash account, and a debit in your inventory account.

2. Get help.


If you're like most small business owners, you lack both the time and enthusiasm to keep a detailed ledger. Accordingly, find a good CPA in your area or take advantage of bookkeeping software to make your life easier. A simple rule is that if your business is operationally complex, dependent on precise and timely records, or large, you should definitely engage professional help. Do you have a considerable inventory? Do your employees perform billable work on client sites? Do you expect to do $100,000 in sales this year? If the answer to these questions is yes, don't wait to get bookkeeping help.

3. Capture financial data.

Whether you delegate bookkeeping to a CPA (or other in-house financial specialist) or decide to use bookkeeping software, make a habit of holding on to everything: sales receipts, purchase orders, bank statements, etc. Create a dedicated filing system for every type of financial data.

4. Put financial data to work for you.

Do you know how much you spent on office supplies last month? Can you estimate how much business tax you'll pay next quarter? Can you forecast sales? Can you generate a list of non-paying customers? The answers to these and related questions come from categorizing the data you capture. Fortunately, this is where software can help. Small business-oriented tools such as QuickBooks, Peachtree, and Microsoft Office Accounting Professional will do the heavy lifting of categorization and prediction for you. This helps your bookkeeping to go beyond administration and begins to offer your business insights that can speed up your cash flow, grow your revenues and better inform your decisions.

5. Handle the IRS.


The IRS likes records, paper trails, and audits; so should you. Certify all mail to the IRS, request return receipts and keep the correspondence record accessible in case of a dispute over your bookkeeping practices. Contact a local taxpayer advocate (http://www.irs.gov/advocate/content/0,,id=150972,00.html) in case of intractable disputes.

6. Leverage your books.


Good bookkeeping gives you credibility. Use it. Remember important audiences (such as banks and other credit sources) who may not get excited about your company based on its products or services, but who will be won over by a carefully-documented record of financial success.

7. Stay close to financial data.


Employing a CPA or delegating bookkeeping to an employee doesn't give you an excuse to separate yourself from the financial details of your business. As the owner, you are legally and professionally responsible for your business activities. You needn't spend hours every day poring over the books, but always have a big-picture idea of where the financial data is trending. This is another realm in which bookkeeping software can be advantageous, because it can give you custom views into your financial records. Using such software, you can decide to run and refresh basic reports every day, so that you can see important data captures (such as profit and loss, overdue accounts and monthly expenses) at a glance.

8. Ensure data validity.

Bookkeeping software and the assistance of hired help only go so far. Sometimes you will be the only person who can ensure the validity and timeliness of data. If an important customer's address changes, record it immediately in your bookkeeping system. Read through your vendor list to make sure that one vendor isn't listed by two names. Performing these small but vital acts of diligence, and training your employees to remain similarly alert, requires you to adopt a detail-oriented way of acting.


The devil of bookkeeping is in the details. Approach these details with a keen focus, and your bookkeeping will reveal crucial information about your business's health and vitality. Attention to financial details pays off, in both the short and long terms.

For as little as $75.00 per month I can help you have the peace of mind you deserve.  Call now for a FREE consultation and estimate, (562) 420-0043.

http://www.checkedandbalancedaccounting.com/

IRS to Get Tougher on Sole Proprietor Audits

The Internal Revenue Service will be taking additional steps to check on whether sole proprietors are hiding sources of income during field audits.


A report by the Treasury Inspector General for Tax Administration found that IRS field examiners are generally effective in checking for unreported income during field audits of sole proprietors. However, the report recommended that the IRS could take further steps to determine if additional sources of income need to be reported.

While IRS field examiners generally check for unreported income, TIGTA found that the IRS could improve the accuracy of its preliminary cash transaction analyses by taking greater advantage of performance feedback mechanisms and ensuring that appropriate personal-living-expense data are being used. The preliminary cash transaction analysis involves little or no taxpayer burden, but uses tax return and personal expense data to determine whether the sole proprietor’s income and expenses are roughly equal.



“Tests for unreported income during IRS audits of sole proprietors are critical to the process of verifying that the correct amount of tax is reported,” said TIGTA Inspector General J. Russell George in a statement. “Our results indicate that sole proprietors may have avoided tax and interest assessments of over $8 million in fiscal year 2008.”

The IRS’s National Research Program estimated that unreported business income by sole proprietors accounted for $68 billion (or 20 percent) of the $345 billion tax gap. This is due in large part to resource constraints and the need to balance audit coverage across other segments of the tax return filing population, such as corporations and partnerships.


TIGTA recommended that the IRS issue guidance to group managers to provide specific written feedback to examiners on the adequacy of their tests for unreported income, and that the IRS reinforce the requirement and importance of using appropriate personal-living-expense data in preliminary cash transaction analyses. The IRS agreed with these recommendations and plans to take the appropriate corrective actions

Take action now!  For as little as $75.00 per month you can have your bookkeeping done professionally and be stress free at tax time.

Call now for your free consulatation - (562) 420-0043

http://www.checkedandbalancedaccounting.com/