Alisa A. Mitchell CPA PAHopefully you’re having a wonderful December with all of the holidays and parties this month. And if you’ve spent too much on gifts and decorations, never fear. Here are six ways to save on your accounting and taxes. But hurry, you only have until year-end to cash in a few of these tips.
1. Check your profits
After adjustments, are your books going to show a profit this year? If so, you may want to try to increase business spending before year-end so you won’t have to pay as much in taxes. Consider accelerating larger expenditures to reduce your profits and therefore, your 2016 taxes.
If your business is cash-basis and you pay with a credit card, pay the card off before year-end so that it will fall into this year’s deductions.
There are many tips on business deductions, so check with us to get the full benefit.
2. Eliminate payroll headaches
If your payroll system is causing you pain and suffering, consider switching. Year-end is the best time because switching costs are lower and year-to-date amounts don’t have to be entered. You’ll still want your old system to generate January’s W-2s, but if you start writing 2017 paychecks out of a new system, it will give you a clean break.
And if you’re not sure what system to move to, we have answers.
3. Make January smoother
January is typically a bookkeeper’s busiest month of the year. Many tasks can be done early, such as checking to make sure your W-9s are current and ordering W-2 forms if they are needed. To avoid last-minute headaches, check with us to see what can be done early. It may help keep your accounting costs lower.
You may also want to consider automating more of your accounting system. Adding an app to your existing system may save you time and money in 2017.
4. Give to your favorite charity
Giving to your favorite charity may reduce your personal taxes if you plan to itemize your deductions on Schedule A of Form 1040.
There are many personal deductions that can help reduce your taxes, so check with us for options to minimize your tax payment.
5. Get ready for tax time
Start collecting the documents you need for tax time so they’ll be handy when you need them. You may be able to upload them to your accountant’s portal, or simply set them aside in a special drawer or folder.
Go through your receipts to be sure you communicate all your possible deductions. If you’ve had a major event, such as a move, new child, new marriage, or new job, be sure to mention it to us.
When all of the parties are over and the relatives have left, try these tips to save time and money on your taxes and your accounting in 2017.
Do you ever need to collect information from your customers? There are many ways to do it: a form in Microsoft Word®, a fillable PDF, and a Web form are all very common. Less common but slicker than the rest is the option of using Google Forms.
You’ll need a Google ID, and most people use their gmail account for this. Go to Google Drive from your menu, or you can access it from this URL: https://drive.google.com.
In Google Forms, you can have customers complete a line or paragraph of text, select from multiple choice, check a box, select from a dropdown, rate an item on a linear scale, or enter a date or time. To design the form, decide what questions you want to ask your customers.
Start creating your new form by clicking the button labeled New in the top left corner of the screen and select More, then Google Forms.
Title the form by typing over Untitled Form. Your first question is already formatted for you. Multiple choice is selected, and you can change the question type by clicking the arrow on the right side of the Multiple Choice option. Over on the left, you can type your first question or label. Let’s say you need to know their name, so you would enter “Name” in the field and change the question type to Short Answer.
To add a field, click the plus sign on the vertical menu to the right of the form. Repeat this until you have all your form fields entered. If you need to add instructions, choose the TT option on the vertical menu just below the plus sign. You can also add images, video, and sections to your form using this menu.
Clicking the Send button allows you to email the form, get a link (click the chain icon), or add it to a web page (click the <>).
There are dozens of options and settings for your form. You can change colors (palette icon at top right), preview your form (eye at top right), or modify your settings (gear icon). The three vertical dots at the top right provide more functions. If you need a team member to access the responses or edit the form, you can Add Collaborator from this menu. You can even turn the form into a quiz.
Once people start submitting their answers, you can review them by clicking the Responses tab at the top of the form.
Google Forms are versatile, professional-looking, and best of all, free. Give them a try next time you need to collect information from your clients.
Tim Ferriss made the 4-hour workweek a popular concept in his 2007 book. But is there such a thing, and more importantly, can business owners like you and me cash in on it? As the last of the Baby Boomers approach retirement, the topic of working less while making the same or more income is popular.
Here are five ideas to help you work fewer hours while making the same or more income.
Active vs. Automatic Revenue
Some business models allow you to generate automatic revenue. Automatic revenue is revenue you can earn and leverage over time by doing something only once and not over and over again. Active revenue is earned while doing something over and over again. Showing up for a teaching job with a live audience is active revenue while producing and selling video recordings of the same teaching is automatic revenue.
A goal of a 4-hour workweek concept is to increase automatic revenue while reducing active revenue. You may have to think out of the box to do this in your industry, but the payoff can be huge.
Delegation and Outsourcing
One traditional way to move to a 4-hour workweek is to have others do the work. Hiring staff frees up your time and allows your business to become scalable. When it runs without you, it’s more salable too.
Time Batching
If you have a lot of distractions in your day, you can easily double your productivity by learning time batching, which is grouping like tasks together in a block or batch of time and getting them done. For example, if an employee interrupts you with questions multiple times a day, train them to come to you only once a day to get all their questions handled at one time. Take your calls one after the other in a group, and then stay off the phone the rest of the day. Do the same with email, social media, running errands, and all of your other tasks.
Automation and Procedures
New apps save an amazing amount of time. List all of your time-consuming chores and then find an app that helps you get them done faster. For example, a scheduling app can reduce countless emails back and forth when setting meetings and appointments. To-do list or project management software can cut down on emails among you and your staff. And apps like Zapier can connect two apps that need to share data, reducing data entry.
Leverage
The key to working less is to embrace the concept of leverage. How can you leverage the business resources around you to save time, increase staff productivity, and improve profits? It takes discipline and change, two difficult goals to accomplish. But when you do, you will be rewarded.
If you’re struggling with your accounting system, it might be a sign that you’re ready for something new. Perhaps your company has grown so much that it’s outgrown its older accounting solution. Here are several indications to look for that justify moving to an accounting system with more features and scalability.
User Permissions
Some companies have a need to limit certain functions to certain users. Most systems come with basic functional limitations, such as restricting Accounts Payable and Accounts Receivable functions. But what if you need more granular user permissions such as access to only purchase orders or a certain bank account? Mid-market systems like QuickBooks Enterprise provide those features.
Multiple Companies and Consolidated Financial Statements
Do you have multiple companies that are the “children” of a parent company? You might need consolidated financial statements and the ability to open multiple companies at the same time.
Number of Customers and Vendors
If your business is growing and the number of customers and vendors you do business with exceeds 14,500, you will have reached a list limit in QuickBooks Premier. Each system has their own list limits, and these limits can get complex quickly, so check with us if you feel you are getting close.
File Size and Performance
There may also be file size limits that you need to watch, especially if you have a high volume of transactions or multiple years of history in one file.
You could also have performance issues. If you have a new PC and your accounting system is still running slowly, we can help you improve your performance by condensing your file or setting preferences differently before you have to switch.
Inventory Features
A mid-market system like QuickBooks Enterprise provides advanced features, such as tracking inventory in multiple locations, using the FIFO method, and managing lots or serial numbers. If you need these features, it may be worth it to switch.
Enhanced Customization
Most mid-market accounting systems provide better customization such as additional custom fields, better reporting, and improved form design.
Number of Simultaneous Users
The final reason to switch to a larger accounting system is if you need more simultaneous users. QuickBooks Pro allows for up to three simultaneous users, QuickBooks Premier handles up to five, and QuickBooks Enterprise makes room for up to 30 simultaneous users. QuickBooks Online allows up to 25 simultaneous users. Check with us if you are curious about your system’s license limits.
Did any of these reasons resonate with you? If so, let us know so we can discuss your needs.
An interesting way to fund your dream project, whether you are a startup or a more established business, is to consider crowdfunding. Crowdfunding is when many people provide the money in small amounts for a project.
Although crowdfunding is not new, it became much more popular when organizations like Kickstarter, Indiegogo, RocketHub, and GoFundMe created web platforms to enable this method of raising funds. The 2015 crowdfunding market is estimated at $34 billion and is growing exponentially.
In crowdfunding, the person who initiates the project receives the money that the people contribute. The web platform that supports the project usually gets a percentage of what’s raised. It varies as to what the people who contribute to the project receive in return. It can be the payback of a loan with interest, shares of stock, rewards, or a possible tax write-off in the case of a donation.
You probably hear about companies that get funded overnight, making it look easy to create a successful crowdfunding campaign. There is a lot that goes into the launch of a successful campaign. Here are some steps:
- Design your project and research how much money you need
- Choose your platform (Kickstarter, Indiegogo, etc.). This requires careful research about which platform is best for your type of project as well as a complete understanding of the rules and limitations of that platform. For example, on Kickstarter, if you don’t reach your goal, you don’t get any money, including what you have partially raised.
- Create a video that tells your story and makes the pitch. You must not only grab attention but appeal to both the rational and emotional sides of your followers. You must also provide an enticing reward for your followers.
- Count your followers. Do you have enough to raise the capital you need? If not, create the marketing you need to build your followers and make your numbers.
- Gain some big name backers if you possibly can.
- Develop a carefully orchestrated launch using multiple marketing channels, including social media and press.
With the explosive growth in crowdfunding, it’s here to stay. Consider how it may help your business grow.