Accountant Juan Llantin offers year-end planning advice for businesses looking to make strong financial decisions now that will help reduce taxes later. By FINSYNC You probably put plenty of effort into winning new clients, increasing income, and reducing costs, but there’s another area that can directly impact your business capital that often gets overlooked. Minimizing tax liability is one of the most significant things you can do to affect the bottom line of your business. Unfortunately, too many business owners wait until tax season to start looking for ways to reduce their taxes. Most of the steps you can take to minimize taxes should be done before year-end. We talked with Juan Llantin, an accountant in the FINSYNC Network, for the most important steps you can take now to reduce your taxes. Keep Good Records When it comes to taxes, the most important factor is knowing your business expenses and income. This comes through strong record keeping. According to Juan, “About half of the businesses we work with don’t keep records. At year-end they run into problems because they don’t have the records necessary to find possible deductions.” It’s important to regularly monitor your financial statements, identify income sources and keep track of your expenses so you have a complete record of your business to share with your accountant. If you plan on deducting your vehicles, you need to keep records for fuel, mileage, and every associated cost. Your financial information should tell the story of your business in a way that gets your accountant up to speed and helps them identify possible tax exemptions. Work with your accountant to make sure you’re keeping records throughout the year, and maintain them in a way that makes it clear what expenses are and what the reasoning behind them was. “Don’t wait until the end of the year to start tracking expenses,” says Juan. Validate All of Your Information Beyond helping you identify potential deductions, keeping strong records helps you validate those deductions. If the IRS requests validation of specific expenses, the burden of proof is on you and it could end up costing your business. “Most of the businesses we talk to try to deduct expenses that they can’t validate,” says Juan, “If we take those deductions and are then in a situation where you’re audited by the IRS, you will end up with the burden and will need to pay.” Look for Potential Deductions Your accountant does not work in your business every day. This can make it difficult for them to identify potential deductions based on activities or expenses throughout the year. Help your accountant learn about your business so they can help make deduction decisions for you. If possible, work with an accountant that has experience in your area and industry. Some deductions are industry or location specific. Here are a few ways you can save on deductions.
- Open a 401(k) A 401(k) or IRA is a great way to increase employee loyalty while saving money on taxes. A SIMPLE IRA is a strong option for owners of small businesses looking to provide retirement benefits for employees and for themselves. They are generally less expensive and less complicated than a 401(k). Whatever plan you choose, it must be open before December 31st to save on this year’s taxes.
- Donate to Charity Donations to charity are an easy way to generate deductions. Before donating, check if the organization you are donating to is on the IRS donation list to make sure you can deduct those expenses.
- Defer Income or Accelerate Expenses The end of the year is a good time to manage your cash flow in a way that maximizes your tax savings. Deferring income to the following year or making vendor payments before year-end can impact your annual income and help improve your tax liability.
- Accountable Plan An accountable plan helps you reimburse employees for business expenses which aren’t counted as income. This IRS regulated plan allows you to take a tax write-off from these expenses. In addition, you can save money on federal taxes through these reimbursements.
Learn how bank reconciliation works, why it’s important and how you can make it easier to identify mistakes in your small business bookkeeping. By FINSYNC Bank reconciliation is the process of comparing your internal financial records to those provided by your bank. Bank recs are an incredibly important part of small business bookkeeping because they can help you identify, alleviate and prevent the inconsistencies that impact your bank account, such as accounting errors and fraudulent transactions. How Does Bank Reconciliation Work? Bank reconciliation involves periodically making sure that the transactions you have assigned to a particular bank or credit card account in your accounting software match your statements. You’ll want to make sure there are no:
- Date errors
- Amount errors
Why is Bank Reconciliation Important?Bank reconciliations are an important step in safeguarding your business because they help you identify discrepancies in accounting before they grow into a serious problem. The longer a business goes without a bank reconciliation, the more likely it is to discover that cash balances are much lower than projected, which can result in bounced checks and overdraft fees. Spot Fraud Before It's Too Late Bank reconciliation should be an important priority for every small business as it enables you to spot signs of fraud before it’s too late. Unlike consumer accounts, small business accounts are not federally protected, which means banks are under no obligation to cover fraud or errors in the account. When reconciling your accounts, look for the following red flags:
- Were any checks duplicated or changed?
- Were any checks issued without authorization?
- Were there any unauthorized transfers or withdrawals from the business account?
- Are you missing any deposits?
Disadvantages of Manual BookkeepingThe process of bank reconciliation is straightforward and simple, but also tedious and labor intensive. The majority of small businesses spend hours identifying individual transaction records to spot inconsistencies that can be alleviated. Manual bookkeeping and bank reconciliation involve the use of paper ledgers and financial journals to record transactions. These tools are not only inefficient, they’re susceptible to human error. Streamline Bank Recs with an All-in-One Accounting Tool Using a consolidated, all-in-one accounting platform is far superior to manual bookkeeping for many reasons, but primarily because it enables small businesses to:
- Reduce the time spent on manual data entry.
- Minimize the number of mistakes attributed to human error.
- Increase the accuracy of profit and loss statements.
- Provide an archive of all financial transactions including receipts and pending checks.
- Maximize data security with regular backups.
FINSYNC’s Network of Virtual BookkeepersWhen your accounts are synced up on FINSYNC’s platform, the manual data entry that bank reconciliation often requires disappears entirely. While a tool like FINSYNC drastically cuts down on the time and labor required for a bank reconciliation, it can be helpful to have an expert manage your books and help solve any problems that may arise. Fortunately, it’s simple to find an affordable, well-qualified bookkeeper. With FINSYNC's network of independent financial professionals, you can hire a vetted bookkeeper to manage your books for you. If your errors are causing blind spots in your business, it may be time to take a look at FINSYNC’s Virtual Assistance Network.
From saving time to getting paid faster, your business can benefit in many ways from automating your back office. By FINSYNC There are many factors that can determine the success of a business, but the three most important considerations are: how well you serve your customers, the quality of the goods or services you produce, and how you differentiate your business from your competitors. The best way to excel in all three of these areas is to focus on them. Back office automation improves the efficiency of your operations by eliminating redundant tasks and generally making it easier for your employees to do their jobs. In this article you’ll learn about back office automation, its benefits and five reasons why you should automate your back office as soon as possible. What is Back Office Automation? Automating your back office is a simple way to eliminate antiquated, inefficient, paper-driven or man-in-the-middle processes. This is done with financial software that can store and organize customer data for use in tasks like invoicing, accounting and managing cash flow. Automating your back office not only eliminates paper-driven processes, it minimizes human error and enables company employees to complete their work with greater ease. It can also greatly improve the efficiency of your back-office operations, and the speed at which your employees respond to customer demands. Put simply, back office automation frees up your employees to do what you hired them to do — grow your business. 1. Save Time A back office with zero automation is a back office that is inundated with paper documents and handicapped by tedious physical processes that slow down your internal operations. Automated work processes like electronic record keeping reduces the time your administrative employees spend on unnecessary tasks or steps. 2. Save Money and Reduce Cost In the world of business, time is one of your most valuable resources. It’s best to work as quickly and efficiently as possible without sacrificing quality. We just learned how much time back office automation can save your business, but how does that factor into cost savings? The answer is simple. Back office software does more than automate repetitive tasks — it provides your employees with tools that increase the speed and ease at which they can do their jobs, and minimizes the number of employees that you need to hire to run your business. For example, if you pay an employee $35/hour to create invoices and it takes them three hours to complete that task, you owe that employee $105. However, if that same employee has access to invoicing software that enables them to create twice as many invoices in half the time, they can get twice as much done for half the cost. 3. Get Paid Faster Manual invoicing is more than a tedious task, it’s a barrier to profitability. A business that manually creates invoices is driving up its labor costs, slowing down the invoicing process and increasing the amount of time it takes to get paid. By automating your invoicing or accounts receivable process you make it easier for your customers to do business with you. When you make it easier for your customers to pay you, you can focus on how to deliver better service, speed up the payment process, increase your bottom line and add value to your customer relationship. 4. Manage Cash Flow Better Good decision making is critical to whether your company succeeds or fails, which is why cash-flow management is so important. To make sound decisions, your employees need accurate and reliable financial information. Automating your back office helps you understand your cash flow with powerful tools like heat maps of daily cash balances and forecasting models that show cash flow shortfalls. Your employees can use this information to understand your current and future cash flow situation in order to make sound decisions that benefit your business. 5. Simplify and Consolidate Your Back Office When a business implements financial software with automation capabilities, it immediately simplifies and consolidates many tedious yet important processes like storing and accessing data. In fact, most back office automation software includes cloud storage and backup, which makes it easier for employees to search and find what they need from a central repository. By making it easier for employees to find and access the data they need, back office automation software makes it easier for your team to answer queries and respond to customers quickly and efficiently. Intuitive software can also connect your team members with chat tools and comment sections, which can help them quickly communicate and make decisions. This eliminates bottlenecks and generally makes it easier for your team to work together to further your business goals. The Best Back Office Automation Software Besides saving time and money, automating your back office improves the efficiency of your business and enables your employees to effectively do their jobs with maximum speed and ease. FINSYNC’s suite of financial software streamlines your back-office operations to help you manage your business better and with less effort. It's a convenient solution for the antiquated, inefficient processes that are dragging down your business. If you’re ready to automate your back office and grow your business, get in touch with us today.
From cash flow analysis to automating back-office tasks, adopting these three best practices will keep small business owners on the road to success. By FINSYNC Successful businesses may get their start by coming up with a great idea for a product or delivering a service in a new way. However, innovative ideas and a welcoming market aren't enough to keep a business growing. That takes effective management, especially when it comes to the bevy of key financial tasks that have to be handled to operate a business. How you handle your company's cash flow, meet your payroll needs and set up your back-office operations to run efficiently can make a huge difference in whether your business will thrive or just get by, dogged by problems borne of ineffective financial management. Here are three financial practices that will keep your business on the road to success. Focus on Your Cash Flow Cash flow is a key factor to keeping your business running smoothly, and managing it effectively is crucial to success. Some 82% of U.S. businesses fail because of cash flow problems, according to online business trends portal Visual Capitalist. 29% of those businesses fail because they run out of cash altogether. If you're still cutting checks by hand or using limited financial software that doesn't provide a real-time, future-facing snapshot of how much money will flow in and out, there’s a better way to operate. That's where an online cash flow management system like FINSYNC's can help. The software can send out invoices to your customers immediately after you've fulfilled your end of the transaction, as well as manage and forecast cash flow, among various other accounting tasks. Such systems optimize your accounts receivable and accounts payable processes in order to ensure that your bank balance is sufficient to fund payroll or other large expenses. Let's say you're a retailer. Effective cash flow analysis can help you plan ahead and seek extra financing to avert a projected shortfall or get access to the funds needed to add seasonal workers ahead of the holiday shopping season. Sync Up Your Financial Accounts Staying on top of your company's finances can be a challenge, especially when you're busy handling everything else that your business needs to function. Often the task is left to a bookkeeper or, in the case of a small business startup, the owner — when they can find the time to spare. Armed with off-the-shelf accounting or spreadsheet software, you do your best, but it's often a scramble to keep track of receipts you'll need when it comes time to file your business tax return, or invoices that have yet to go out, or even your own utility bills. Inaccurate financial tracking ultimately costs your business money and undermines your ability to plan for next month and beyond. Avoid this pitfall by syncing up your business' financial accounts. Software like FINSYNC links up all of your financial transaction-related functions, including paying bills, tracking bank deposits and withdrawals, invoicing clients, and cutting paychecks, so that all of your transactions are tracked automatically. How does this help? In addition to streamlining your financial data tracking, integrating your accounts will give you a comprehensive view of your costs. That's essential in gauging the health and profitability of your business. Automate Back-Office Tasks The technology that allows for the integration of financial transactions and other data can also be leveraged to optimize your back-office tasks, which can save you significant time and money. Intuitive software goes beyond just connecting various transaction data, and can be used to automate various back-office tasks, including paying bills, invoicing clients electronically and processing payroll. Automating your invoicing process will also help your business stay on the path to growth by making it easier to collect payments. Overburdened business owners often struggle with this simple task — especially when they still rely on paper invoices that must be mailed. In addition, an online invoicing system can help you set up a recurring invoicing schedule, along with automatic reminders and alerts to notify customers when payments are due or past due. The automation approach simplifies the payroll process as well because it can be used to track the hours that employees work every week. That data makes it possible to consistently generate paychecks that are in compliance with tax withholding requirements. Wondering if your contractor should actually be classified as an employee? Have a question about calculating benefits? Payroll can be complicated on a lot of different levels. The best payroll software is backed by live support in the form of a dedicated, U.S.-based representative that you know by name. When you set up your payroll within an accounting platform like FINSYNC, which syncs up all of your small business finances in one place, taxes are calculated automatically. This automated bookkeeping not only saves you a significant amount of time, it can also dramatically improve the accuracy of your payroll. So what are you waiting for? Implement a few changes and get back to what got you in business in the first place.
Streamline Your Business Efforts with the ABCs of Efficiency Want to run your small business more efficiently? Follow these three simple steps to minimize your efforts and maximize your results. By FINSYNC Who doesn’t wish they could run their business more efficiently? Get more done in less time? And save money while you’re at it? Yes, please — said every small business owner in America. If only it was as easy as that. We’ve got some good news. You don’t have to reinvent the wheel to see real results when it comes to running your business more efficiently. With just a few small changes, you can free up enough time to get back to those big-picture priorities that have been sitting on the back burner for way too long. Ready to start small? Try these three strategies for cutting down your administrative tasks and streamlining your operations. With a little effort, improving your efficiency can be as easy as A, B, C. Automate Your Back Office How much time do you spend on administrative tasks? How would your business benefit if you could use that time and mental energy to map out goals and plan for growth? We know what you’re thinking: Easier said than done. We’ve been there. Small business owners wear many hats, and are some of the most over extended folks out there. All the more reason to take some tasks off of your plate. Sophisticated online tools like FINSYNC can help you put your back office on autopilot. Start with your accounting. Once you sync up your finances online, they’ll be categorized automatically on a complete general ledger, which makes it simple to track expenses, reconcile your accounts and streamline your tax prep. How much time do you spend tracking down invoices? Wouldn’t it be easier if you could pay vendors or collect payments with a single click of a button? You can. Simply set up auto payments and recurring invoice schedules to save endless hours on these tedious administrative tasks. Simplifying your financial management can help you redirect your efforts into matters that need your immediate attention, from sales and customer service to celebrating a recent win with your team. Block out Interruptions According to the experts, interruptions at work are killing your productivity. Perhaps not too surprisingly, 71% of people reported frequent interruptions at work, while only 29% said they’re able to block out everything else while working. If only we could all be so skilled. While it’s not exactly realistic for small business owners to block out every interruption throughout the day, protecting your most productive hours can make a huge difference. When do you do your best work? Get the most done? Whether it’s 7 to 10 a.m. or 2 to 4 p.m., alert your team that this is now your “do not disturb” window. Use this protected time to tackle your most pressing tasks. You should know exactly what these priorities are in advance, so take a moment every day to consider your goals for the following workday. You’ll need to be disciplined about protecting that precious time, as will your employees, but you’ll be amazed how much you can get done without interruptions. To be truly productive, you’ll also have to protect your time from digital distractions that can pull you away from the task at hand. This is not the time to Google gift ideas for your significant other, or catch up on social media. Resist the temptation to go down these alluring rabbit holes so you can focus on what’s truly important to your business. Note that it may take a bit of practice to focus effectively in today’s digital landscape. Be disciplined about your efforts, and your uninterrupted focus will pay off. Consider the Basex survey that discovered that distractions cost companies in the U.S. $588 billion every year in lost productivity. Ouch. Consolidate Your Tools How many different applications do you toggle between throughout the day to run your small business? Do you need an app just to keep track of all your different passwords? Bouncing around from accounting software to a payroll app and yet another site to track your work hours isn’t exactly an efficient use of your time. Perhaps it’s time to get organized. Managing your small business finances from a single platform (with one password) is a streamlined way to operate. Synching up your small business finances also allows you to harness the power of your financial data to give you a complete picture of where your business has been — and where it’s going. Simplify your workflow with an easy-to-use all-in-one system that not only takes the drudgery out of day-to-day tasks, but also provides actionable insights that can help your small business grow and thrive. From smart online tools that can tackle your administrative tasks to protecting your most productive time, follow the ABCs of efficiency and you’ll be rewarded with dividends, with a capital D.
Free up time to focus on mission critical areas by putting administrative tasks on autopilot with intuitive online tools that can do the heavy lifting for you. By FINSYNC Running a small business can make you feel like you’re stuck in a circus-juggling act. It’s difficult enough to keep the doors open and make sure your employees get paid without the added pressure of tracking your cash flow and keeping your books. It can seem near impossible to find the time or energy to harness the passion that got you into business in the first place, much less focus on sales, customer service and other areas that require your immediate attention. Financial management shouldn’t feel like a full-time job. There’s no better time than right now to get a handle on overwhelming administrative tasks so you can get back to the heart of your business. FINSYNC is here to help: We’ve got three intuitive tools to help you win the battle against runaway financial management once and for all. Automate Your Accounting Are you tired of spending endless hours filling in spreadsheets? Is your budget a little too tight to hire a full-time bookkeeper? We hear you. Fortunately, there’s an easier — and less expensive — way to get a handle on your accounting. In a word: automate. It’s never been easier to sync up your finances with a sophisticated online tool that can take care of your accounting automatically. Simply import your bank transactions, and they’ll be automatically categorized for you on a complete general ledger. Easily track your expenses, tackle month-end reconciliation, and prepare your taxes in a fraction of the time. You can also generate reports that make it simple to drill down to the details you need. Bottom line? Automating your accounting is a shortcut to actionable insights that can help you make better business decisions. Invoice on Autopilot Are you still spending time writing checks, preparing invoices and mailing all of the above? What if you could pay vendors or collect payment for your goods and services with the click of a button? It’s that easy with invoicing software that can save you hours on administrative tasks. Set up recurring invoice schedules and auto payments to shrink your to-do list, and skip those excruciating calls to overdue clients with alerts that automatically remind customers when payments are due — or past due. Invoicing on autopilot saves ample time and makes it easier for you to both collect and make payments. The benefits extend to your clients by making it easier for them to pay you, which can help you get paid faster and keep your cash flow solidly in the green. Simplify Cash Flow Management You know how important it is to monitor your cash flow, but somehow keeping track of the money that flows in and out of your business can seem like an overwhelming task. What if we told you that cash flow management doesn’t have to be difficult? Beyond helping you get a handle on your current cash flow, intuitive online tools can make it easy to spot trends and plan for the future with automatic projections based on your history. Once you can see where your cash flow is going, it’s easy to make adjustments and schedule payments to avoid a dreaded shortfall that can put you in the red. Visualize your past, present and future with the help of automatically generated charts and graphs that give you a picture of your cash flow that’s easy to comprehend — and act upon. The Power of Consolidation How many different apps, passwords and software systems does it take to run your business? If you’re still keeping track of a slew of disparate systems to handle various financial management tasks, consider improving your efficiency by consolidating your efforts onto one system. When you sync your finances on FINSYNC’s platform, you get access to all of the tools you need to automate your accounting, invoice on autopilot and easily analyze your cash flow. In other words, you can automate your back office from a single platform with one password. Simplify your financial management to save time, get more mileage out of your resources, and maybe even get back to all of those things that inspired you to build your business in the first place.