3 Tips for How to Manage Your Small Business Credit
Cash flow management is often listed as one of the primary concerns of small business owners. And while a small business may be great at what they do, if they aren’t in the financial industry, they may not understand that comprehensive and consistent management of their business credit is extremely important.
Here are three simple things you can do to better manage your small business credit:
Establish a Business Credit History
Many small business owners, when they are first starting out, put their business expenses on personal credit cards. However, from the very beginning, they should be working to establish a credit history for their business by establishing a business line of credit and putting those expenses on the business credit.
Pay Bills On Time
This seems like a no-brainer, but it’s one of the most important aspects of managing both your personal and business credit. Paying the right amount, on time, on a regular basis, not only keeps those you’re paying happy, but it actually improves your credit.
Monitor Your and Your Customer and Vendor Credit Files
Credit files aren’t just for running credit reports on potential partners/customers, but they’re also important to managing your own credit history. There are several free credit checking services online, run checks on your business’s credit throughout the year to make sure you are staying on-top of any changes.
Beyond it just being important to manage your business credit, there are numerous benefits to actively managing your small business credit including: protecting your business against fraud and theft, making smart credit decisions, and securing more financing at better terms.
If you have questions about managing your small business credit, Contact Kristina’s Abacus today!
Setting up Payroll for Your Small Business: 4 Steps to Get Started
Setting up a payroll system for your small businesses starts with the same few steps whether you have a business with 10 employees or 100. Setting up a payroll system allows you as the small business owner to streamline the payment process so that you can focus on other aspects of your business. But where do you even start? In this blog post we list the four necessary steps all Small Businesses (SMBs) should take before choosing a payroll system:
Get an Employer Identification Number (EIN).
Issued by the IRS the Employer Identification Number (EIN) is necessary for tax administration and reporting information about your employees to government entities. Learn more about applying for an EIN online from the IRS.
Understand the difference between Independent Contractors and Employees.
The legal language around these two different types of workers isn’t always that easy to understand, however, how you withhold taxes and handle payroll is different in both cases. Understanding and designating these correctly in official forms is extremely important in making sure that you are reporting accurate information.
Determine a Pay Period
Pay periods are often determined by state-laws; they’re usually set either monthly or bi-monthly. Before businesses set up a system, it’s important to be aware of your state’s laws regarding pay periods to make sure you are in compliance.
Document Employee Compensation Terms
Setting up payroll requires more than just determining how much and how often your employees get paid, it also includes considering vacation days, benefits and sick leave. Clearly documenting employee compensation terms helps to protect you, as well as your employees, from incorrect compensation and misreporting.
Hopefully, these four steps will help you get started in choosing a payroll system, setting it up, and streamlining your businesses’ payment process. If you need more help choosing and/or setting up a payroll system contact us today!
3 Simple Signs You Hired the Wrong Accountant
Many small businesses end up hiring an accountant to manage their finances, once they reach a certain number of employees and/or level of business. But, once you’ve hired an accountant, there are a few signs you must watch out for in order to make sure you’ve hired a capable and effective asset to your business. In this blog post, we share the three signs that you’ve hired the wrong accountant:
1. They Don’t Respect Deadlines
This is a red flag for really anyone you do business with. If someone doesn’t respect the deadlines you set or the deadlines you’re being held to, it makes it extremely hard to get anything done. However, when it’s your accountant who doesn’t respect deadlines, the risk potential increases substantially. This is because they are able to affect every aspect of your business either positively or negatively; and that could have serious financial and/or legal consequences.
2. They Make Simple Mistakes
There are certain aspects of work that seem small and insignificant, but they do have a larger impact on the overall quality of work. If you are noticing your accountant is sending you forms, contracts, emails, etc. with multiple spelling and grammatical errors, this is a red flag that they don’t pay attention to detail. When it comes to your finances, you want to hire someone who pays attention to even the smallest details.
3. When Things Go Wrong, They Blame YOU
The famous saying “the customer is always right” is relevant here, but not just in a customer service sense. SMB’s hire accountants to give them guidance, they need to be able to guide you to make good financial decisions and if they are unable to explain to you where and why you need to invest your finances, then the failure is on them. And, at the very least, your accountant needs to be able to take responsibility in those situations and make a plan for correcting the mistake.
Hiring an accountant for your small business is an important decision and choosing the right one isn’t over once you have hired one. Once you hire an accountant, it’s important to make sure you’ve hired one who understands your business needs and standards and can adapt to suit you.
The Cost of Keeping the Books Clean
I am at the end of another crazy, whirlwind season of getting client’s books “cleaned up” and ready to go to the CPA to prepare their income taxes. One of the most common statements that I hear during this time of year is, “This shouldn’t be so hard, what I am doing wrong?” and “What do I need to do to clean up the books for the CPA?” and my personal favorite, “Can you teach me how to use QuickBooks?”
QuickBooks Software has changed the way that we think about things in the bookkeeping and accounting industry. QuickBooks has opened the door for the business owner to be more a part of their bookkeeping. QuickBooks made bookkeeping user-friendly and helps save money by allowing the business owner to do a lot of the input themselves. Prior to the QuickBooks revolution, accounting was kept separate and done very traditionally by a professional who understood not only the software, but the accounting cycle.
This QuickBooks accounting innovation has been a good and a bad thing for business owners. It saves money to do things yourself when you can. After all bookkeeping is not rocket science, right? However, many small business owners are made to feel a little stupid when accounting with QuickBooks because it may feel like it is rocket science… when it is supposed to be simple. You are entering your checks, sending out your invoices out, downloading your banking transactions; you are basically keeping up with everything. Why are the reports not working and how do you get to the reports to begin with? Why do you have strange numbers in weird accounts? Why does your CPA charge you so much at the end of the year to clean it up? What are they “cleaning” and what, exactly, are they doing that you are not doing?
The answer is: There is a big difference between learning how to “use” QuickBooks and learning how to do accounting.
It might sound like I am not a fan of QuickBooks, but I am. I am a 100% QuickBooks shop. I think that QuickBooks is best and worst thing that has come out so far. I think it is great because it has made it easier for the small business owner to be involved and it is pretty easy to use. I think for the same reasons, it is the worst. It makes it look easier than it really is and puts added pressure on the business owner to do it themselves. There is a big difference between understanding QuickBooks and understanding accounting. Accounting is an equation that always needs to balance. It is a constant algebra problem that at the end of the month, quarter ,and year, needs to tie together. That is what clean books are. Clean books come from the cash balancing and the trial balance being clean (no it isn’t just the amount of cash you have in the bank and if you reconciled your bank statement). I think that business owners have enough on their plate trying to run a business without trying to learn accounting (unless they like accounting). I know this because I am a small business owner and I know how many hats that I wear. Just because I can do something doesn’t mean I am saving money if it takes away from my revenue-generating activities and takes me twice as long as a professional who does it on a daily basis.
Clients say to me that they feel “stupid” because they just can’t seem to get something that should be really simple. I generally look at them and I let them know that I don’t know how to do their job either. For the longest time I tried to do my own marketing and finally decided it was not working, for the amount of time I was putting into it, and hired professional help. They have been amazing, and they make it look so simple. However, when they talk to me about my strategy and technical details, my eyes glaze over and I tell them to just continue doing an awesome job. So what was the cost of this increase? I pay money now instead of time. However, that money generates new leads which increases revenue and reduces my stress.
The moral of this story is… the cost of keeping the books clean is not free. It is going to cost you, either time or money. Do you understand more than the software you are using? Do you know the accounting cycle and equation? It costs a lot less money to hire someone to help you routinely keep the books clean than it does to “save“ money all year and bring in a whole year that has gone wonky.
Whatever stage you are in with your QuickBooks adventure, Kristina’s Abacus can help you. Contact us today!
Small Business Accountants vs. Bookkeepers: Which does your SMB Need?
For many small business owners the question isn’t “when is it time to find an accountant or bookkeeper?”, but instead, which one should they hire? In this blog post we’ll discuss the difference between a small business accountant and a small business bookkeeper as well as what you need to know in order to figure out which one your SMB needs.
What’s the difference between hiring and accountant and hiring a bookkeeper?
A bookkeeper keeps records of financial transactions, while an accountant analyzes recorded financial transactions. To put it in another way: accountants look at the big picture, whereas the bookkeeper’s job is to give you a clear view of the current one as well as implement day-to-day tasks.
Is it more expensive to hire an accountant or a bookkeeper?
In general, bookkeepers aren’t as expensive as accountants as bookkeepers often don’t have the same level of education and/or experience as accountants or CPAs. However, that doesn’t mean you can find a good bookkeeper with tons of experience, who’s a perfect fit for your needs, it’s just that accountants typically come with a higher level of expertise.
How do I decide between hiring an accountant and hiring a bookkeeper?
This answer is different for different small businesses and it depends on a number of different factors including what industry the SMB is in, how complex their financial structure is, do they need financial guidance and do they need a tax expert.
Hiring a bookkeeper is great if you need someone to manage your finances day-to-day and bring any important information to your attention in order to address it and/or call in a CPA if a higher level expertise is needed. Hiring an accountant is great if you tend to have a lot of financial and/or tax questions.
Where do I find an accountant or bookkeeper?
Start by asking around. Who do your peers use? Who do your coworkers use? What have their experiences been like? Even if you don’t end up hiring the same person, they could give you a referral or steer you in a direction you hadn’t thought of before. If you’re looking online, look for an accountant who is interested in being a resource and who is creating content for their customers to use, not just content aimed at marketing to new clients.
Whichever you decide is best for your small business, whether it’s hiring an accountant or a bookkeeper, it’s important to remember what your financial needs are and pick someone who has a good understanding of that. Once they understand your needs it’s much easier to make sure they are an effective and beneficial addition to your small business.
Top 20 List of QuickBooks Resources for Small Business Accounting
The following list of how-to’s, reviews, updates, and QuickBooks community happenings has been compiled to assist small businesses using QuickBooks accounting software. If you have any questions about using QuickBooks accounting software for your small business don’t hesitate to contact us at Kristina@KristinasAbacus.com or call us at 425.658.0030.
QuickBooks How-To’s
How to Choose the Best QuickBooks Software for Your Business – Overview of the four different QuickBooks software from Kristina’s Abacus.
What's New in QuickBooks Accountant 2013– A list of new features and how best to utilize them in the new QuickBooks.
Small Business Budgeting – Using QuickBooks – Information for small business budgeting and how to get started using QuickBooks from Kristina’s Abacus.
What’s New in QuickBooks for Mac 2013 – A list of new features and how best to utilize them in QuickBooks for Mac users.
QuickBooks Tutorials – 3 videos for how to use QuickBooks including how to remove account numbers from the chart of accounts in QuickBooks and how to process vendor bills and batch payments in QuickBooks from Kristina’s Abacus.
How Do I Revert QuickBooks 2013 Back to Look Like Earlier Versions? – Step-by-step instructions for restoring the look of your QuickBooks to a more familiar version.
Prepare Your Form 1099 MISC Online and Paperless – Instructions for how to prepare, e-Deliver, and e-File your 1099-MISC forms in 2013.
Have a more productive tax season with QuickBooks -QuickBooks provides wonderful tools to improve your tax season productivity.
A Simple Chart of Accounts for Small Business – a list of account names and types for understanding QuickBooks terminology from Kristina’s Abacus.
Keep your Software Updated- Why it is important to have the most recent version of your QuickBooks Software.
QuickBooks Reviews
QuickBooks Pro 2013 Review – A look at the Pros & Cons and screenshots of the new interface.
QuickBooks Premier Edition 2013 – A review from PC Mag, including pros and cons, pricing, and list of new features and how to use them.
Review: QuickBooks 2013, Despite its Quirks is Good for Business – MacWorld review of QuickBooks 2013 with an emphasis on how this accounting software benefits businesses.
QuickBooks Gets a Major Redesign – PC World review, primarily focused on inventory-based business software shortcomings.
Before You Buy: Small Business Accounting Software Reviews – Review of QuickBooks Pro 2012 comparing ease-of-use, reporting, support and compatible operating systems to other small business account software.
QuickBooks Updates
QuickBooks 2013 New User Interface – Learn about QuickBooks new interface and all of the most important changes.
QuickBooks 2013 Has Arrived! Here’s What to Expect – Overview of QuickBooks 2013.
What’s Improved in QuickBooks 2013: Top 5 Wishes Granted – A list of the best new features and functions in QuickBooks.
QuickBooks Community
QuickBooks Meetup Groups – Meet with other small business owners at these meet-ups and learn QuickBooks tips and tricks from your peers.
QuickBooks 2013 Certification Exam and Courses – Get QuickBooks certified listed on the Find-A-Pro website with these courses from Intuit Accountants.
6 Signs that You Need to Hire an Accountant for your Small Business
Many small business owners take on their accounting tasks themselves when they are first starting out. However, accounting isn’t always as straight-forward as it seems, and so here we’ve listed the six signs that you need to hire an accountant for your small business:
1. Simple Bookkeeping is getting Time Consuming
With accounting software options like QuickBooks, a lot of accounting and bookkeeping tasks can easily be done by people outside of the financial industry. Many small businesses start out by using accounting software like this to cut costs by bringing accounting and bookkeeping services in-house. While this may work perfectly for companies with only a few employees, once those companies begin to grow, simple bookkeeping and accounting work can begin to take up a considerable amount of time. Many people hire an account not because they are incapable of doing the work, but because they don’t have the bandwidth to get it done.
2. Financial Statements are Hard to Understand
Financial statements can be extremely difficult to understand even with a working knowledge of accounting. If the majority of the financial statements you are receiving are hard for you to understand, we highly recommend hiring an accountant; at the very least to act as an advisor.
3. Your Business has Government Regulations it needs to Follow
Managing payroll and having a good understanding of accounting and taxes is one thing, but staying up-to-date on government tax regulations in your industry can be extremely time-consuming and difficult. Hiring an accountant with expertise in your industry can help you make sure that you are meeting all of the tax requirements and regulations you’re required to.
4. Financial Reports are Important to you and/or your Investors
So, you are able to carry out most accounting and bookkeeping tasks yourself but you have an investor who’s interested in detailed financial reports about your business. Hiring an accountant to create these reports not only keeps your investors happy, but having that second pair of eyes on your financial work can help you to make sure all of your business finances are in order.
5. You’re having Nightmares about Tax Season
Being your own accountant/bookkeeper can get especially difficult around tax season when you are responsible for sending out tax forms for all of your employees. Hiring an accountant for your small business can help you make sure that you are staying on top of all tax filing requirements.
6. Your Business and Number of Employees are Growing Fast
If your business is a business of two or three people, it may make the most sense to do your own bookkeeping to begin with. However, as your business starts to grow, the more employees you take on the more paperwork, the more accounting and bookkeeping work takes place.
No matter what size your business is, hiring an accountant and/or bookkeeper can help you make sure your finances are always in order and allow you to spend more time doing the things you love – like running your business.
For more information on how Kristina’s Abacus can help you and your small business, contact us today!
3 Cost Effective Local Search Marketing Options for Small Businesses
Getting found online is becoming more and more imperative for small businesses in order for them to stay competitive. Customers now expect to be able to research your company, products, and services online, if they can’t, you’re losing business. However, for small businesses that are just beginning to market themselves online, there are a few options they have for getting local customers to find them immediately.
#1 Geographic SEO
Search engine optimization (SEO) is a set of processes designed to get your website found via search engines for relevant search queries. Geographic SEO is a set of processes designed to get your website found for relevant local searches. There are several options for implementing geographic SEO on your website. Here are a few:
Page Titles: every page on your website has a page title that is displayed at the top of the browser. Include your location at the end of each page title to optimize for local searches.
Page Footer: You may have noticed that some business websites display their address at the bottom of each of their webpages. By including a footer with your geographic location on each of your webpages you’re optimizing all of your content for search engines, in a way that isn’t distracting to the user.
Blog: blogging for your business is a great way to create more content and therefore more opportunities for customers to find you online. Make sure that you are creating optimized content with your blog using keywords that are relevant to your products/services as well including your location.
#2 Maps
All of the major search engines now have them and their free to get listed. Whenever internet users are searching for a product/service in a certain location, search engines will display a map of all of the relevant business locations near you (the search engine can tell you’re searching from Seattle, so they’ll show you results in Seattle). Whether you have a physical address for your business or not, you can get listed on these maps.
#3 Online Directories
Get listed on all relevant online directories in your industry and area. Not only will people who are using these directories be able to locate you, but directory pages are often indexed in search engines as well and can be displayed for relevant search queries.
Though getting found online is becoming more and more difficult as more and more businesses are marketing themselves online, these are a few simple things we all can do to make our businesses stand out from the masses. Maybe you have some favorite tools or techniques you use in your small business? Please feel free to share them below!
Small Business Tips for Building Brand Awareness
Marketing a small business on a small budget isn’t easy, but if you have a strong brand, it makes many aspects of marketing your small business much simpler. Not only is having a strong, cohesive, and consistent brand an important aspect of marketing, but building your brand awareness is equally essential.
What is brand awareness?
Brand awareness is the process in which businesses get customers to know who they are and what they’re about by marketing to them while simultaneously promoting their brand through logos, images, taglines, content, etc. Though brand awareness is considered a marketing tactic, the marketing isn’t always direct or obvious. Brand awareness is more about incorporating your branded logos, images, taglines, messages in content your customers are searching for, with the idea that those customers will begin to remember you, become familiar with your business, and ultimately begin to trust your brand.
Why is brand awareness important?
Brand awareness is important because your brand represents your company, and allows customers to get to know what your business is about. Building a brand is about building a personality and trust, both of which add immense value you to your business, products, and services.
Who are the targets of brand awareness?
Brand awareness isn’t just for your target customers; there are in fact four different groups of people you want to be targeting with your brand awareness efforts:
1. New Customers – brand awareness should be a part of your overall business objectives, and your overall business objectives most likely include bringing in new customers and growing your business, and so building brand awareness among them is a given.
2. Influencers – in every industry there are groups of “influencers”, people within the industry who are able to influence others because they are considered trusted sources. Making your brand appealing to these influencers encourages those influencers to promote your brand. On the other hand they could influence people to not trust your brand.
3. Current Customers – building brand awareness among your current customers is important not only in that you want to make sure they stay your customers and continue to purchase products/ services from you, but also in that it can help encourage word-of-mouth, the most invaluable marketing tactic there is.
4. Purchase Decision Makers – though your brand may be appealing to an audience, you want to make sure your brand is appealing specifically to the customers who are able/empowered to make purchase decisions (a quick example would be children’s cereal commercials that are marketed to parents).
How is brand awareness built?
Brand awareness is about increasing the number of people who know about your brand and your business. And so, including your brand in logos, messages, taglines, copy, etc. is one of the easiest and most efficient ways to boost your brand awareness. However, beyond just incorporating your brand in all of your online and off line content, there are a number of other things you can do to start boosting brand awareness:
1. Attend Local Events both in your industry and in your target markets. Get out there and start meeting your target audience where they’re meeting. Become part of the conversation.
2. Get Social – start using social media, commenting on online forums, answer questions from relevant online communities, establish yourself online. This is a great option for people who aren’t able to go to local events, and they’re great for learning about local events as well.
3. Reach Out – start building relationships with other people online, either by linking to their content, guest posting on their site, commenting on their blog posts, etc. The more you participate the more people will engage with you online as well as off.
These are only a few ways you can start to build brand awareness, and whichever tips you decide to follow, just remember that the most important rule in building brand awareness is that you are authentic. Be Genuine. If you are truly interested in growing your business then you must be genuine and authentic both online and in person whenever representing your brand. Your brand has a reputation that is extremely important to protect. If your business and brand are going to be sustainable building them starts with building that good reputation.
Where can you build brand awareness?
Many small businesses don’t have a lot of options when it comes to marketing and building brand awareness. However, thanks to the internet, there are quite a few inexpensive ways in which small businesses can build brand awareness among all of their target audiences:
1. A Website – your website is not only the perfect place to really showcase your brand and promote your business, but as people use the internet more and more, having a website for your business is becoming imperative in order to stay competitive.
2. Blogging – Once you have a website up, it’s important that you start creating content for that site, the logic being that the more content you create, the more opportunities you give internet users to find your site. Blogging is one of the easiest ways to start building your brand, because you can give your brand a voice that can’t be represented in a logo or tagline.
3. Social Media – Though not thought of as a marketing centric channel, the great thing about social media is it provides a space for businesses and customers to communicate in a way that they’ve never been able to before. Social media is where businesses can share more of their personality and promote their brand, and social media marketing efforts are centered more around building a relationship with the customer rather than marketing to them.
4. Paid Search Ads – often referred to as pay per click (PPC) or cost per click (CPC) can be an inexpensive way of getting your business and brand in front of your target customers. Even if an internet user doesn’t click on your ad they still get to see it, and if your brand is compelling, perhaps it’s the second of third time they see the ad that they click it.
Building a brand takes time. These tips should help you start building brand awareness, but creating and maintaining your brand will be a long process. But don’t dread it! Your brand is something to be proud of, and you will be if you take the time to invest in it.
Keeping the Books Neat – 10 Bookkeeping Tips for Small Business Owners
2013; it is a brand new year. Whatever your personal new year’s goals are, this year make it a priority to start off right in your small business with clean, organized books, and a plan to keep them that way.
After all, if you don’t know where you stand with business finances, projections, shortfalls, and other elements of the financial health of your business, you won’t know if you are winning or losing.
Here are 10 tips to help you kick start the new year with organization and planning.
1. Have a bookkeeper create a chart of accounts for your company’s specific needs. Keep it concise, but thorough. I have found that for most small businesses, it is easier to work without a numbered chart of accounts. You can turn this option on or off in QuickBooks in the preference section. Instead, use a chart of accounts designated alphabetically.
2. Take time daily or weekly to add your receipts into accounting software. Once I have entered the receipts, I mark the receipt with a red pen to let me know that it is entered. I keep the receipts in a file to await the statement. The file can be a physical file, or if you prefer, you can scan the receipts and keep the in a file on your computer or cloud. When your statement comes in, it is very easy to match the receipts to the statement and reconcile the statement to the accounting software.
3. Keep your vendor list clean and use NOF (not on file) vendors for transactions that you will not be using again so your vendor list doesn’t get outrageously long and complicated.
4. If you have recurring transactions each month, “memorize” the transactions in your accounting software, so you don’t have to re-enter them each month. This saves a lot of time and insures that you are entering the transaction the same way each time.
5. Leave notes for yourself in customer accounts, vendor accounts, checks, bills, journal entries. Make notes that will mean something to you when you look back on the transaction later.
6. Don’t try to do your own payroll. Payroll companies are not expensive and are well worth it.
7. Make sure to name your checking, savings, loans, line of credit accounts clearly in your chart of accounts so that you don’t ever get confused what account is which when you are reconciling. I like to label the accounts in this format: “ Banner Checking xx1234”. This is much clearer than “Checking Account”. What if you change banks, or have more than one account?
8. DO NOT mix personal and business expenses. Get a separate account and credit card. Keep them separate! If there is the only point that you take away from this article, this is the most important.
9. If you have contractors or professional companies working with you that are not Incorporated, you will want to make sure that you give them a W-9 so that at the end of the year, you will know who needs a 1099 issued. It is better to give someone a W-9 that doesn’t need it, than not give one and it is needed. It is also easier to get a W-9 from people before they are paid. They will want to get it back to you quickly to expedite their payment.
10. Finally, have a professional bookkeeper or accountant review your books monthly or quarterly depending the volume of transactions and your bookkeeping skill. Do the things that you feel comfortable doing and get on a schedule for a professional to keep everything else on track. This approach will make your year-end process and CPA cost much more manageable.
Kristina’s Abacus can help you set up these systems to get you on the path for success for 2013. Contact us today!
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