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    What Is Return on Assets?

    posted by Maria Tanski
    Newest Article
  • What Is an Audit Trail?

    When you maintain a complete and accurate audit trail, you can [theoretically] have a stress-free audit process.

    Every day, your business records the transactions for that day. It is important to record the transactions correctly and have adequate documentation to support your entries. This documentation acts as an audit trail. There are multiple types of audit trails; this article is about audit trails in your accounting for small business.

    What does an audit trail include?

    An audit trail is the set of source documents that validate the transactions recorded on your business’s books. When you or your accountant records the business’s transactions, you base the entries on an event or activity of the business. An event can be anything from a daily sales transaction to a building acquisition to the disposal of equipment.

    The documentation for an event or activity may involve one document or a series of documents that support the transaction. Examples of documentation include:

    What Is a CPA?

    If you are in business, you have likely considered using an accountant or a CPA to handle certain aspects of your business finances. But did you know that not every accountant becomes a CPA? It’s important to understand the difference, especially since inaccuracies, misstatements, and errors in financial documents can affect core functions within a company. You should certainly know more about who is handling your finances.

    What Are Bylaws?

    Bylaws are legal documents that comprehensively outline the rules, regulations, and guidelines of any organization.  Bylaws are often filed along with a corporation’s Articles of Incorporation when the business is first formed.

    Bylaws include the structure of the organization, and they are primarily established to protect the rights and itemize the duties and responsibilities of  the directors, CEO, stockholders, and various committee members.

    Cash-basis Accounting: the Pros and Cons

    The way you do your business’s accounting may be second nature to you. You may have begun tracking your finances in a purposeful, informed manner, or you may have stumbled into an accounting method by default.

    Whichever way you’re handling your business’s accounting, it’s likely you made a conscious or unconscious choice to use one of the two major methods: cash basis accounting or accrual accounting.

    For smaller businesses, cash basis accounting does have several advantages over accrual methods.

    Do I Need an Accountant for My Small Business?

    You started your own business because you like doing things your own way. You have a skill set that you’re putting to use to make money for yourself.

    As your business grows, you quickly move beyond the simple pleasures getting paid for doing what you love. Before long, you’re saddled with retaining receipts, managing taxes, and processing payroll.

    Would it be easier to let a professional accountant do some of the heavy lifting for you? When do you need an accountant?

    Pros and Cons of Sole Proprietorship

    Are you a sole proprietor now, or are you planning to start up your own business? Many people own and operate a small business as the sole owner. You might have employees, might be part-time, might work from home, etc. This article discusses the pros and cons of sole proprietorship and some tax information you’ll want to know.

     

    A sole proprietorship is a small business owned by one person. It is the One-Man Show, so to speak. The owner has total control over the business and is personally responsible for all of its obligations and liabilities. According to the U. S. Census Bureau, 73 % of our 28 million small businesses are sole proprietorships. Let’s take a closer look at the different pros and cons of a sole proprietorship.

    6 Must-Know Accounting Tips for Your Small Business

    You can make yourself (and your accountant) happy by following the six accounting tips below.

    Accounting is and always will be a critical function of the savvy business owner, but accounting doesn’t have to be a nightmare or something to dread. It just takes a little perseverance and planning to ensure that your records are as accurate and complete as possible.

    Each of these activities is an “accounting best practice” and represents steps to take throughout your fiscal year.

    Disclaimer: I am not an accountant. These accounting tips are based on good advice from accountants … and 28 years of business experience.

    You Need a Profit and Loss Statement for Small Business!

    As a small business owner, understanding the profit and loss statement (P&L) is absolutely crucial. The P&L is an important tool for small business owners to have, use, and maintain on a regular basis. Consider using accounting software to make P&L creation significantly easier.

    The P&L helps you see an accurate picture of your finances. You can use a P&L to present your business’s health to others.  You might show potential investors, accountants, or auditors your profit and loss statement.

    What Is a Private Letter Ruling from the IRS?

    A private letter ruling (PLR) is provided by the Internal Revenue Service (IRS) in response to a taxpayer’s written request for clarification of an unusual tax situation.

    Although the federal tax laws are numerous and complex, they are general in nature and do not cover every possible variable. When taxpayers are faced with a situation not addressed in the tax laws or not explained clearly, a written document can be filed with the IRS requesting clarification.

    Collections Problem? Your Invoice Is to Blame…

    You want to make money, so you need to make sales. And you really want to get paid, so you send out invoices. Then, you wait and wait for payments.

    You’ve got a collections problem … and your invoice is to blame!

    After years in business, we now have an accounts receivable record that amazes bankers (true!) … but back when we invoiced our first customer, we were ignorant. Basically, we didn’t know the differences between an invoice and a statement and a packing slip and a bill of lading … and a box of Kleenex!

    For our first invoice, we were so ignorant that we didn’t know what should be on the document. Since there was no Internet to search for samples, we went to an office supply store and bought a little packet of generic invoice forms. Then we filled in the blanks by hand — which was pretty lame since we were selling accounting software solutions!

    So to shorten the learning curve for you, here are the basic facts about invoices.

    What Is an Audit Trail?

    When you maintain a complete and accurate audit trail, you can [theoretically] have a stress-free audit process.

    Every day, your business records the transactions for that day. It is important to record the transactions correctly and have adequate documentation to support your entries. This documentation acts as an audit trail. There are multiple types of audit trails; this article is about audit trails in your accounting for small business.

    What does an audit trail include?

    An audit trail is the set of source documents that validate the transactions recorded on your business’s books. When you or your accountant records the business’s transactions, you base the entries on an event or activity of the business. An event can be anything from a daily sales transaction to a building acquisition to the disposal of equipment.

    The documentation for an event or activity may involve one document or a series of documents that support the transaction. Examples of documentation include:

    What Is a CPA?

    If you are in business, you have likely considered using an accountant or a CPA to handle certain aspects of your business finances. But did you know that not every accountant becomes a CPA? It’s important to understand the difference, especially since inaccuracies, misstatements, and errors in financial documents can affect core functions within a company. You should certainly know more about who is handling your finances.

    What Are Bylaws?

    Bylaws are legal documents that comprehensively outline the rules, regulations, and guidelines of any organization.  Bylaws are often filed along with a corporation’s Articles of Incorporation when the business is first formed.

    Bylaws include the structure of the organization, and they are primarily established to protect the rights and itemize the duties and responsibilities of  the directors, CEO, stockholders, and various committee members.

    Cash-basis Accounting: the Pros and Cons

    The way you do your business’s accounting may be second nature to you. You may have begun tracking your finances in a purposeful, informed manner, or you may have stumbled into an accounting method by default.

    Whichever way you’re handling your business’s accounting, it’s likely you made a conscious or unconscious choice to use one of the two major methods: cash basis accounting or accrual accounting.

    For smaller businesses, cash basis accounting does have several advantages over accrual methods.

    Do I Need an Accountant for My Small Business?

    You started your own business because you like doing things your own way. You have a skill set that you’re putting to use to make money for yourself.

    As your business grows, you quickly move beyond the simple pleasures getting paid for doing what you love. Before long, you’re saddled with retaining receipts, managing taxes, and processing payroll.

    Would it be easier to let a professional accountant do some of the heavy lifting for you? When do you need an accountant?

    Pros and Cons of Sole Proprietorship

    Are you a sole proprietor now, or are you planning to start up your own business? Many people own and operate a small business as the sole owner. You might have employees, might be part-time, might work from home, etc. This article discusses the pros and cons of sole proprietorship and some tax information you’ll want to know.

     

    A sole proprietorship is a small business owned by one person. It is the One-Man Show, so to speak. The owner has total control over the business and is personally responsible for all of its obligations and liabilities. According to the U. S. Census Bureau, 73 % of our 28 million small businesses are sole proprietorships. Let’s take a closer look at the different pros and cons of a sole proprietorship.

    6 Must-Know Accounting Tips for Your Small Business

    You can make yourself (and your accountant) happy by following the six accounting tips below.

    Accounting is and always will be a critical function of the savvy business owner, but accounting doesn’t have to be a nightmare or something to dread. It just takes a little perseverance and planning to ensure that your records are as accurate and complete as possible.

    Each of these activities is an “accounting best practice” and represents steps to take throughout your fiscal year.

    Disclaimer: I am not an accountant. These accounting tips are based on good advice from accountants … and 28 years of business experience.

    You Need a Profit and Loss Statement for Small Business!

    As a small business owner, understanding the profit and loss statement (P&L) is absolutely crucial. The P&L is an important tool for small business owners to have, use, and maintain on a regular basis. Consider using accounting software to make P&L creation significantly easier.

    The P&L helps you see an accurate picture of your finances. You can use a P&L to present your business’s health to others.  You might show potential investors, accountants, or auditors your profit and loss statement.

    What Is a Private Letter Ruling from the IRS?

    A private letter ruling (PLR) is provided by the Internal Revenue Service (IRS) in response to a taxpayer’s written request for clarification of an unusual tax situation.

    Although the federal tax laws are numerous and complex, they are general in nature and do not cover every possible variable. When taxpayers are faced with a situation not addressed in the tax laws or not explained clearly, a written document can be filed with the IRS requesting clarification.

    Collections Problem? Your Invoice Is to Blame…

    You want to make money, so you need to make sales. And you really want to get paid, so you send out invoices. Then, you wait and wait for payments.

    You’ve got a collections problem … and your invoice is to blame!

    After years in business, we now have an accounts receivable record that amazes bankers (true!) … but back when we invoiced our first customer, we were ignorant. Basically, we didn’t know the differences between an invoice and a statement and a packing slip and a bill of lading … and a box of Kleenex!

    For our first invoice, we were so ignorant that we didn’t know what should be on the document. Since there was no Internet to search for samples, we went to an office supply store and bought a little packet of generic invoice forms. Then we filled in the blanks by hand — which was pretty lame since we were selling accounting software solutions!

    So to shorten the learning curve for you, here are the basic facts about invoices.