CPA Firms and Functions

Many CPA firms have turned out to be well established and most reputed companies in America. Basic functions of CPA firms include accounting systems, auditing and attestation, taxation, management consulting, business valuation, information systems consulting, information systems auditing and forensic accounting. This is why CPAs are so important for successful businesses and entrepreneurs, as they count on these firms for keeping them financially on target and ahead of the game.CPA firms usually collaborate with well-educated, efficient individuals who play a significant role in the growth in their company. For improving their skills, these firms hire staff that updates their skills on a regular basis, to match up with the market standards. CPA firms are expected to have established standards, policies and procedures appropriate to the various areas for facilitating volumes of reports they have to create. The policies could be as precise as managing cash flow, software billing, and recovery. Every CPA firms makes these policies known to the employees through training and written content. The Internet technology is also used for educational purposes. Moreover, CPA firms should constantly grow with the clients, fulfill their changing needs and remain relevant to them. In present times, there has been greater state and federal regulation, increased focus on corporate governance and rigorous analysis by he general public and media. Due to this CPA firms have an increased concentration on risk management. While many CPA firms know the importance of dealing with the financial statement audit risks, they cannot overlook the tax engagement risks. If not, these firms may have to handle losing clients, malpractice suits, incur state and Federal penalties and damage their reputation. In addition to the typical accounting functions, there are many specialty disciplines:. Assurance and Audit: To ensure that the financial statements correctly present the financial performance of the company. . Financial and Tax Planning: Recommending tax, investment, and savings options for eliminating control expenses, debt, optimize investments, and minimize tax burdens.. Internal Auditing: Evaluating efficiency of an entity control structure, as an outside consultant or an employee. CPA professionals are in demand on account of new corporate governance rules and regulations.. IT Services: Integrating, Designing, and applying advanced software systems that function as a link between organizational goals and software/hardware.. Forensic Accounting: Detecting, preventing, and looking into financial frauds like securities fraud, embezzlement, money-laundering schemes, and tax evasion. Requests for this specialty have significantly grown due to various corporate scandals.. International Accounting: Companies embracing International Financial Reporting Standards (IFRS) want accountants for reuniting IFRS with U.S. GAAP. . Environmental Accounting: Dealing with how companies can be both environmentally profitable and responsible. This means concentrating on various projects like management and prevention of claims and disputes and environmental compliance audits. . Consulting Services: Offering different specialty services for companies that include strategy and operations planning, financial planning, and performance management. . Financial Analysis: Evaluation of identifying trends, business data, and contribute to the long-term strategies of a firm. . General Accounting: Performing account analysis and reconciliation, processing journal entries, preparing payroll, sales, using tax, and other local tax filings.
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About the Author: Sacramento CPA Firm Murray and Young provides California Tax Help. Check out our new website that includes useful articles on Estate Tax Planning. Visit us at http://www.april15.com.

CPA Estate Planning Services

The process of Estate planning comprises of the distribution of assets after the demise of a client. The assets must be distributed to people or causes without the involvement of legal complications and tax incidence. When a CPA offers estate-planning services, the services not only include basic financial analysis but a good foresight of the planning model. The planning model should be created, taking into consideration the parameters of the clients life-family, finances, business, lifestyle, and goals. A CPA role in estate planning can be summarized as working with your clients to identify and clarify their goals, explain projected tax and other consequences, and recommend alternative strategies.Identifying GoalsA CPA must assist his client in identifying the right estate planning goals. A CPA must create a definite estate-planning model offering clients services that guide and preserve the disposition of their assets. The estate planning must include reduction in the estate tax by offering sufficient liquidity. A CPA must also help his client to come to terms with the prospect of death before the estate-planning model is created.Listing the background detailsA CPA would need to be versatile. He should be able to:. Accumulate fact files about the clients existing financial situation. Key out any anticipated assets (remainder interests, life insurance proceeds, potential inheritances, etc.) . Formulate and list estate liquidity needs . Review relevant documents (existing wills, trusts, insurance policies, retirement plans, etc.)Estate Planning Strategies:After realizing the expectations of a client and creating a catalog of his assets, debt paying ability and legal documents, a CPA must elaborate and assess workable strategies that are sufficient enough to execute the estate planning services. The strategies must include parameters such as analysis of income and estate taxes paid over the last few months.Planning for Property TransferUsing appropriate articles of law, A CPA can discuss property transfers. This discussion should not violate prohibitions regarding the laws on estate planning. A CPA can assess future transfers of property that may occur by will, by operation of law or the laws of intestacy. Managing the Estate Planning Team An essential part of the CPAs role is to work with the different members of the estate planning team that comprises of insurance brokers, attorneys, appraisers, actuaries, investment professionals, etc. They ensure that the strategies have been properly implemented and developed to ascertain whether all the important concepts have been included in the overall plan. Monitoring and ImplementingThe CPAs usually advise their clients on putting into practice the various recommendations that have been presented. This includes coordination of various activities like the selection of an attorney for drafting documents; gifting programs; transfer or retitling of assets; and purchasing insurance. Moreover, it is essential that CPAs monitor the changes in the clients business, health, family, and other life situations on a regular basis so that they can easily assessing the ongoing validity of an estate plan. Ancillary Matters Based on the relationship shared between the CPA and the client, a CPA could be asked to guide them in the selection of trustees, guardians, executors, and other fiduciaries that have been appointed throughout the estate planning process. CPAs also discuss the significance of advance directives, like the potential of the attorney, health care proxies, and living wills.
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About the Author: Sacramento CPA Firm Murray and Young provides California Tax Help. Check out our new website that includes useful articles on Estate Tax Planning. Visit us at http://www.april15.com.

CPA and Tax Planning

Since 1981, tax laws have been undergoing constant change. Keeping this in view, individuals and business owners should have a financial advisor for guiding them through the various changes that influence their circumstances. CPAs can help you prepare for a lifetime of efficient tax planning as they are equipped to address a wide range of financial needs with insight and integrity. Basically, a CPA prepares all the required tax returns for ensuring that the taxpayer is paying only the necessary taxes. All through the year, the CPA monitors tax law changes that could affect the taxpayer, proposes tax saving policies. Moreover they serve as an advocate in matters of tax planning and payment of taxes. Job of a CPA in tax planningThe CPA plans certain transactions, so as to postpone the income taxes. There are times when they structure a transaction to completely avoid income taxes. However, there are many transactions that come with income tax penalties and taxpayers are unaware about the variations. This is when the role of the CPA comes into play. They meet the concerned client and acquire ample information about the proposed transactions. Thereafter they research the workable alternatives with tax consequences. This way, both the office and the client are aware of the tax end results and are not shocked at a later date. CPA Tax planning for business ownersIn case of business owners, the CPA carries out tax planning by choosing the business entity within which they have to function. The business could be a corporation, a sole proprietorship, a partnership a limited liability company, or a small business corporation. Since all entities have their share of advantages and disadvantages, it is essential that the CPA select the right entity.CPA Tax planning for retired individuals or businessesRetirement plans prove to be excellent tax planning tools. CPAs suggest which retirement plan is suitable for an individual or the business as a whole. Moreover they propose retirement plan based on the required qualify and help with the queries tax holders have.CPAs help individuals and business owners in filing taxes every year. They also prepare state and federal income tax returns on a routine basis for individuals, mall business corporations, corporations, and partnerships. Clients who have recently moved in from another state can still avail of getting a tax return. Besides planning the taxes, CPAs also provide a tax organizer to the help in collating information for preparing an exact tax return. Clients fill the required information and mail back the organizer to the CPA. In such situations the client and the CPA may not even meet face to face, but they do have occasional conversations over the phone. Among the other returns CPAs also prepare various workers compensation reports, intangible and tangible personal property tax returns and payroll tax returns. People often say that they dont plan to fail, but fail to plan. It sure is true, if timely advice was obtained from a CPA, it would have saved people from the shock of unexpected tax obligations and avoided the unpleasant phone calls after tax returns have been completed.
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About the Author: Sacramento CPA Firm Murray and Young provides California Tax Help. Check out our new website that includes useful articles on Estate Tax Planning. Visit us at http://www.april15.com.

CPA And Their Pay Package

Certified Public Accountant (CPA) is the legal title given to qualified accountants who pass the Uniform Certified Public Accountant Examination in the United States. Besides they should also require meeting state education and get certification as a CPA. In many American states, CPAs with license can only provide their opinions and suggestions professionally on several monetary statements. A number of states have prohibited the use of designations Certified Public Accountant or Public Accountant by a person who does not have a certification for the CPA title. Consequently, in a number of circumstances, an out-of-state CPA is not allowed to use their CPA designation till he obtains a license or certificate from that state. Corporations in finance functions like Chief Financial Officer (CFO) or finance manager generally employ CPAs. Besides, CPAs are also employed as CEOs, provided they have authentic knowledge and experience. It hardly matters whether CPAs offer services directly to the public or indirectly when employed by corporations or association, they can easily operate in any possible area of finance. Some of the areas of work of a certified CPA are as follows:Financial accountingPlanning financeVenture capitalCorporate GovernanceFinancial analysisInformation technology, basically as applied to auditing and accountingAudit, assurance and information integrityManagement consulting and performance managementCorporate Governance Preparation and planning taxCPAs earn a lot in accounting professions. They get handsome salaries even at the entry level, particularly for those who have a CPA certification. Surveys and reports suggest varying figures for CPAs pay package. The salary of a CPA depends upon several factors. One of the main factors that affect the salary of a CPA is the state where they practice. Besides, their position in the organization, years of work experience and the size of the organization also determine their pay package. Some of the states like California and New York offer high pay package as compared to companies belonging to other states. Higher the size of the organizations and designation held by CPAs, higher the pay package. Generally, CPAs having one to three years of work experience get salaries ranging from $35,000 to $47,000 in small firms and $42,750 to $60,000 in large firms. In addition to these, individuals having a masters degree along with a CPA certification were found to earn around 10% more than individuals as compared to people who do not have the essential certifications.If you tend to stay in a firm for a long period then you are likely to get a salary around $175,000. This package increases with the increase in the experience of an individual and the size of the organization. CPAs working as directors with big companies commands salaries ranging from $85,000 to $130,000 and those working with medium size companies CPAs can expect salaries ranging from $76,750 to $111,000. The salaries of CPAs working with smaller firms come in the range of $71,500 to $90,250. In business and industry, companies that earn sales of more than $500 million per year offer CPAs a handsome salary ranging from $244,500 to $347,250. Besides basic salary, CPAs at a very senior levels, gets good bonuses and incentives.
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About the Author: Sacramento CPA Firm Murray and Young provides California Tax Help. Check out our new website that includes useful articles on Estate Tax Planning. Visit us at http://www.april15.com.

Qualifications Of A CPA

CPA means Certified Public Accountant and this is a designation, which is offered to eligible accountants who clear the Uniform Certified Public Accountant Examination conducted by the United States. Along with this, the accountants must also posses the required state educational qualification and experience. The CPA license provided to the candidates, who clear this exam, protects the general public from inefficient accountants who perform substandard work. The first law of accountancy was passed the year 1896 by the New York state law, in order to test the credentials of the accountants. After this law was passed accounting evolved as a profession and was tagged with the licensing requirements and this profession followed with some professional ethics and certain working standards.Many states followed this lead and ultimately fifty-four jurisdictions accepted the public law accounting legislation. The licensing authority solely lies in the hands of the Board of Accountancy as well as for compliance with the state laws. Most of the accountants practicing in the US hold the CPA license and those practicing without it are prohibited. As a result in most of the cases the CPA certification was not allowed to be used outside the state until professionally licensed or certified by that particular state.How to become a CPA in United States?To become a CPA in the United States you have to take and clear the Uniform Certified Public Accountant Examination. The American Institute of Certified Public Accountants sets the examination rules and the National Association of State Board of Accountancy administers this test. Individual boards have their own eligibility criteria for the Uniform Public Accountant Examination. A candidate with a Bachelors degree in accounting along with an additional one-year study is eligible to take up this exam. Certified Public Accountants work in various financial areas such as:. Audit, assurance and information integrity. Forensic accounting like detecting, preventing and investigating frauds related to finance. Planning and analyzing all the financial status. Venture Capital. Information technology. Plans and prepares taxes. Corporate governanceDue to frequent fluctuation in the nature of work, it is very essential for a CPA to keep abreast with all the latest developments in the accountancy field, even if the changes are very small or the old or new laws amended to reflect changes. Any ignorance is this matter is not appreciated. CPAs should also be aware of the various tasks including the finance, taxation, planning and the advisory rules. So in order to create a benchmark for yourself, it is necessary to opt for ongoing educational courses.There are various educational institutions including some non-profitable sectors that offer ongoing professional courses for the CPAs. In many states a professional CPA licensure is required to take professional education regularly to keep him or her updated. A CPA is generally required to take some time off from his busy schedule so that he can take up new courses. These continuous educational updating courses can also take the form of conferences as well as seminars. These are generally headed by professional or by popular speakers who share their experiences, knowledge as well as skills.
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About the Author: Sacramento CPA Firm Murray and Young provides California Tax Help. Check out our new website that includes useful articles on Estate Tax Planning. Visit us at http://www.april15.com.

CPA Tax Outsource- How Viable Is It For Your Accounting Firm

As soon as the peak-taxing season comes, accounting firms often get buried with several jobs related to tax return preparation. During the main season, customers rush to their CPAs in order to get their tax returns prepared in time. It is the responsibility of an accounting firm to deal with the work pressure and to meet the ever-growing demands and deadlines given by their customers. No accounting firm would like to spoil their reputation by not meeting the deadlines. CPA tax outsourcing is considered to be a good option for accounting firms that often get over-loaded with work but find it difficult to deliver the required work within the deadline. CPA tax outsourcing help boost business prospects of an accounting firm and allows them to get more clients. Many people get scared just by hearing the term CPA tax outsourcing and do not pay heed to thinking of hiring a CPA for managing work pressure during the peak season. Unlike the popular notion, CPA tax outsourcing is one of the most authentic ways of managing tax related work pressure. It allows a third party to do the task for your accounting firm. They do all the highly time consuming and tiresome work for your clients on your behalf. A firm needs to check the efficiency of the CPA who would work for them. Generally, they are highly qualified professionals, who work efficiently in their job and charge a small amount, which would be apparently less than half the amount that an accounting firm would charge for the same amount of work. By outsourcing your tax related assignments to CPAs, you can save hefty sums of money for your accounting firm. You the amount of money you can save by incorporating CPA Tax Outsourcing for your firm! The saved money will add to the profit of your company. It will not only increase the profit for your company but also spread goodwill about your company. Mostly everyone wants to know about the money they are required to pay as taxes to the government. If your accounting firm can manage to calculate and inform them about it on or before required time then you can be sure that you can attract more customers to your accounting firm. Besides accounting, an accounting firm needs to do a lot of other things such as calculating tax return preparation and bookkeeping. In such a case, CPA tax outsourcing is considered to be the best option for you to manage the excess workload. Once the CPAs are through with the time taking work, they can focus on other necessary things required in the development of a firm. They can work on suggesting clients and working on various other aspects generally used for generating new business leads for the accounting firm. CPA tax outsourcing has a number of benefits, which includes that anytime you find that the outsourcing company has not completed the work properly you can directly take it back to them. Though CPA tax outsourcing is one of the most convenient ways of managing the work pressure, it is highly essential to check with the reputation of the outsourcing company whose service you are planning to hire.
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About the Author: Sacramento CPA Firm Murray and Young provides California Tax Help. Check out our new website that includes useful articles on Estate Tax Planning. Bill Murray is a former IRS auditor who can help you with your taxation issues. Visit us at http://www.april15.com.

CPA- Certified Public Accountant Courses

With an accounting degree, you do not simply study a business; you study the world of business. The accounting line of work comprises of employment at certified public accounting companies, offering services like tax auditing along with accounting, personal financial scheduling, and management advising for various patrons. These patrons could consist of individuals as well as companies from the largest corporations to the tiniest start-up firms.For students interested in CPA programs, they need to consider accounting that encourages recognition as well as direction to the dedicated line of work. In addition to this, the programs are planned to offer understanding proficiencies and aptitude that is essential for a flourishing accounting profession. For individuals in the quest to develop into a CPA, programs in accounting can facilitate you to build up the expertise and understand the essentials, to effectively attempt the CPA examination.These programs in accounting offer an extensive experience to diverse company regulations, taking account of administration, organizational performance, trade and industry, statistics, as well as funding, which can facilitate to enhance the proficiency required to partake in the CPA examination.The distinction between a CPA and an accountant: Every CPA is an accountant. However, every accountant is not a CPA. CPAs can be differentiated from other accountants by the strict state and licensing necessities, together with education, assessments, as well as practice. CPAs operational in public practice are in addition, involved to take up Continuing Professional Educational (CPE) classes to keep themselves up to date on every component of the CPA services. They have got to maintain a stringent system of professional principles that the public is aware of and values to a great extent. CPAs are counted amongst the most comprehensively skilled and qualified tax consultants. The accountants who are a part of CPAs are components of an accredited profession that offers you with a feeling of satisfaction and admiration along with providing acknowledgment to your accomplishments.The education requirements: To be eligible for the conditions for licensure, you have to obtain an accounting course endorsed by the Department as licensure qualifying, or else an accounting course that is certified by a certifying organization acknowledged by the Department. At present the Association for the Advancement of Collegiate Schools of Business (AACSB) is acknowledged. The other option is a course decided by the Department to be corresponding to an accredited course. Or 15 years of public accounting practice is good enough to the State Board for Public Accountancy.The course necessities: Programs at the undergraduate or graduate stage or can meet the course necessities by the grouping of both of them. You should be able to secure an average on the whole in the accounting subjects of C or enhanced at the undergraduate stage and B or enhanced at the graduate stage. Programs in central taxation, professional auditing and advanced financial accounting are required to be selected at the higher division stage. The course could be a third or fourth year of an undergraduate course or it could be in an advanced degree course. Every qualified accounting program has got to be accomplished prior to making an effort.
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About the Author: Sacramento CPA Firm Murray and Young provides California Tax Help. Check out our new website that includes useful articles on Estate Tax Planning. Bill Murray is a former IRS auditor who can help you with your taxation issues. Visit us at http://www.april15.com.

CPA Software And Its Uses

CPAs are considered to be trusted advisors to a business. There are softwares available of almost every field of work. There are a number of softwares developed now days to help CPAs. Some software provides financial assistance to the CPAs while there are some that provide accounting assistance. These CPA softwares are designed to help the CPAs to provide assistance to the clients. These softwares are currently being used to serve around 5 million clients in the US alone. Most of the softwares use the extensible markup Language (XML). Softwares like BizBench2007 and TValue Version 5 provide solutions to the needs of a CPA.The softwares help to reduce the paper work. These CPA softwares provide better communication with the clients. They save a lot of time and make the work easy for a Certified Public Accountant. They help the CPA manage their practice more effectively and efficiently. These softwares also contain a wide range of tools and plug-ins to provide additional assistance. The CPA softwares are opening up new areas and help to expand the applications of a CPA. These softwares help the CPAs clients to earn the profitability of their corporation within the exclusive financial structure of the industry, which their business is a part of. The CPA softwares help to perform business valuations, business planning, payroll services and advanced financial statement analyses. Some of the basic uses of some of these softwares are calculating monthly payments, balloon payments, skipped payments, etc. They also help to keep accounting records for any type of the above mentioned payments. They also help to calculate and keep accounts of normal interest, fixed principle plus interest, dollar step and percent step. They also allow one to enter payments on any date. These softwares are available with various computation options Normal Amortization, Canadian Amortization, Rule of 78, US Rule i.e. Simple interest for 360, 364 or 365 days per year. Some software helps to solve problems with changing interest rates and compute Return of Investment (ROI) and present and future financial values.The documents created in some of these softwares can be exported in to a word document (.doc) or an Adobe Acrobat read only file (.PDF). They provide with instant reports as soon as the data is entered. Printing out the report takes longer than it takes to prepare. This is the speed at which the softwares work. The software also does a lot of comparison work. They help the CPAs to compare income statements and balance sheets. They also provide instant graphs to compare any kind of financial data. There are a variety of ratios that can be calculated using these softwares like: Liquidity ratios: Current ratio, Quick ratio and Working capital to sales percentage.Operating ratios: Sales to fixed asset ratio, Sales to working capital ratio and Asset turnover.Profitability ratios: Return on assets percentage, Return on equity percentage, Return on sales percentage.Efficiency ratios: Annual inventory turnover, Operating cycle, Days in accounts receivable, Days in accounts payable, Inventory turnover, etc.
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About the Author: Sacramento CPA Firm Murray and Young provides California Tax Help. Check out our new website that includes useful articles on Estate Tax Planning. Bill Murray is a former IRS auditor who can help you with your taxation issues. Visit us at http://www.april15.com.

Protecting Small Non-Profits from Fraud: An Ounce of Prevention

Small non-profit organizations are very vulnerable to fraud.When I say small, I mean small: organizations that raise less than $100,000 per year and have only one paid staff person or no paid staff persons. I'm talking about neighborhood associations, sports and recreation leagues and all manner of civic, political and religious groups. These small organizations are vulnerable to fraud for three reasons:1.The person responsible for collecting and disbursing funds is also the individual who provides the financial reports.2.Many small organizations raise much of their funds in cash. Cash is more easily misappropriated than checks.3.Small non-profits are run by trusting and committed individuals. Sadly these individuals tend to be too trusting.Here are some sadly typical fraud scenarios:1.Cash collected at fund raising events is siphoned off by the organization's treasurer or some other individual with access to cash collections.2.The treasurer writes checks to themselves out of the organization's checking account.3.The treasurer makes unauthorized and inappropriate payments to vendors for products and services for their use rather than the organizations.Example. Onandon is a non profit organization devoted to helping the children of parents who were excessive talkers. Appropriately enough their major fund raising events are silent auctions. Most of the donations at these auctions are made in cash and deposited in the organizations checking account. The long standing treasurer, Mal Feasance, has been skimming cash proceeds from these events to the tune of about $300 per auction. Plus he has been writing checks to himself in the amounts of about $2,000 per year for several years. Mal has complete control over the checking account and prepares all the financial statements. Ounces of Prevention There are three relatively inexpensive and effective ways to prevent and detect these common frauds;1.Proper Control of Bank Statements2.Requiring two signatures on every check3.Preparation of BudgetsBank StatementsIf an organization has a treasurer who collects and disburses funds from a checking and/or savings account, the monthly bank statements should be sent directly to some other board member of the organization before it is passed on to the treasurer. The recipient of the bank should examine the canceled checks to see that disbursements have been made to only appropriate persons or vendors in reasonable amounts. Using this control would prevent Mal from writing checks to himself. Note: this ounce of prevention will not work unless the person receiving the statement actually opens the statement and examines the canceled checks. If the person receiving the statements just passes them along without opening the envelope, this sends absolutely the wrong message to the treasurer.Two Signature Check Policy Require that every check have two signatures. Barring collusion, this would prevent someone like Mal writing checks out to himself. The requirement of having two signers on a check definitely can slow things down and prove cumbersome. But loss of efficiency and convenience is a reasonable price to pay for protecting an organization's scarce resources.Budgets Every organization should have an annual budget approved by the board of directors. The idea is to have a reasonable expectation of revenues and expenses. With a budget actual results can be compared with expected results. If actual expenses are greater than expected this could be an indication that inappropriate expenditures are being made. Similarly, if proceeds (particularly cash) are being deposited at less than expected levels this might indicate that skimming is taking place. If the organization has cash fund raisers such as dinners, car washes, bingos and so on there ought to be budgets for each event. In the case of fund raisers such as car washes, bingo games and the like it is fairly easy to test for cash theft. Some person other than the person responsible for handling and depositing the cash ought to perform a count of the cars washed, bingo cards sold and apply this number to the unit price to compute the expected amount of cash raised. Example. Suppose Onandon has a bingo game at which cards are sold for $15 apiece. If 200 cards are sold, the net cash deposit should be $3,000.A Question of Trust There is a trade-off involved in implementing the above fraud controls in small organizations. These controls assume that responsible individuals may not be fully honest. When people work closely together in small organizations it is natural for trust to build over time. But diligent observation of fraud controls requires people to maintain a certain degree of distrust. This means that small nonprofits have to be willing either to maintain a degree of mistrust to protect their assets or maintain trust and risk loss of their assets. This is usually not an easy trade-off to make.The Responsibility of the Board of DirectorsIt is the responsibility of the board of directors to insure that adequate controls are in place to protect the organization's assets. In small organizations it will be necessary for actual board members to be involved in the implementation of the controls discussed here. It is also important for board members to understand why these controls are necessary. If board members lose sight of the importance of these controls they are apt to become lax in their implementation and as a consequence the organization's assets will be placed at risk.
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About the Author: Michael Sack Elmaleh is a Certified Public Accountant and Certified Valuation Analyst. His book, "Financial Accounting: A Mercifully Brief Introduction", has received wide critical acclaim. He has nearly 30 years of accounting and 10 years of teaching experience.His web site is understand-accounting.net

Accounting Programs

There was a time when small businesses, especially mom and pop stores could get away without maintaining accounts of any sort. In fact, the sole reason why they were classified as mom and pop stores were because the business was run in an ad hoc manner. But with increasing number of people opting for small businesses and the entrepreneurial initiatives being fostered by governments worldwide, these businesses to have come to represent a large part of the gross domestic produce of countries worldwide. This is where the need for complete accountings programs surfaced and which is why, it has become a big issues for all businesses.There are various accounting programs structured to cater to the needs of all kinds of businesses. While the smaller stores use standalone accounting programs and smaller, single user license versions of the more popular accounting programs; the larger stores need to use a comprehensive suite of accounting programs. Be that as it may, the fact remains that all businesses, large or small, need to use accounting programs of some sort in order to streamline their operations and to comply with governmental regulations.One of the simplest accounting programs available in the market today is Microsoft Money. While most computers bought in the United States of America come pre loaded with this accounting program, it is applicable only for personal finance calculations or maybe small business needs. But as accounting programs go, it is fairly well designed to cater to the needs of smaller businesses. Which explains its popularity in terms of number of users who use it as their primary accounting program.A slightly more evolved accounting program is something that has come to be branded and sold as Tally. Like the name reveals, this is an accounting program that caters to the needs of smaller businesses, where the accounting operation is primarily a function that tallies stock (either available or sold) with the cash available in the machines at the counter. That's not all. An accounting program like Tally comes with a customizable interface making it scalable for a variety of business operations. So smaller businesses even in the services sector are able to use it to streamline their processes.Today, the wide array of accounting programs available in the market make it easier for businesses not only to organize themselves, but also to comply with local, national and global requirements. Every business thus can adopt and deploy the best practices that make globalization beneficial to one and all.
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About the Author: Hans Hasselfors is the founder of http://www.submityournewarticle.com. Visit our article directory for varied articles about accounting.

Accounting Books

Accounting is tricky business, and not everyone has the mind for it. In order to get a degree in accounting, you have to spend a great deal of time in college learning the ins and outs of the profession. Like any profession, there are those who just don't cut it. If you have a more creative mind, accounting may not be for you. I once took a few courses, and did some accounting for a small company. I found it was just not for me, and I stuck with writing to make a living.If you aren't a professional, but need to keep track of your own expenses, you can buy some accounting books and try to teach yourself the basics. The skills needed to take care of your home, and your home business might be something you can handle. Some people choose to buy ledger accounting books to keep track of expenses and income, while others opt for software.Software has a huge advantage over regular accounting books. If you have a basic understanding of what you are doing, you can learn how to put your information into the program, and it will do most of the work for you. It can also generate reports to let you know how you are doing. You can get reports for expenses, profit, operating costs, and anything else you may need to know. Software such as Peachtree Accounting comes with customer support.If you really want to do this, you should buy some textbooks first, and get a grip on the basics. Accounting books can be found online as well as in many major bookstores. You can find more complicated books if you wish to learn everything there is about accounting, or you can buy simpler guides that will teach you what you need to know without going into too much detail. This is great if you want to keep an eye on things, but then will hand everything over to an accountant or tax preparer at the end of the year.If you don't want to spend a lot of money on accounting books and programs, you can look at your local library for books. You may also want to look through eBay or your local classified ads for people selling used books and used software. If you still feel lost, call your local college. They may offer simple and basic accounting courses for those with a home or small business.
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About the Author: Hans Hasselfors is the founder of http://www.submityournewarticle.com. Visit our article directory for varied articles about accounting.

Managing The Financial Aspect Of Your Serious Home Business

Financial management is one of the biggest pitfalls for people who are actively engaged in a serious home business. Even if your have chose a good home business you may have no idea on how to manage your business financially, you will most likely end up losing a lot of money. Since you cannot afford to waste your money, you better shape up and take care of your finances early on. It will not really do you any good if you just keep working on your business not really knowing if you are making enough money to compensate for your efforts.Getting startedThe first thing that you need to do to get your financial systems in place is to open a separate bank account for your business. A lot of home business owners keep their personal funds together with their personal accounts that they end up drawing money, which should have been for the business and vice versa. The practice of mixing up your personal funds and the funds for your business is very dangerous because you will not have much control over you business and personal finances. By opening separate bank accounts for your business and for personal use, you will be able to manage your money better.Aside from setting up a separate bank account for you business, you must see to it that you also set up a separate funds for your business expenses. Since you are working form home, try to separate all the expenses that are related to your business from your home expenses. For instance, your business phone should be paid by money coming from your business account. You might also want to bill your business for utilities and rent. You can do this by setting a certain amount every month for utilities and rent then take this amount from the business account. Out of your business earning, you might also want to set up a certain amount, which you can draw out as your salary. The good thing about setting a certain amount of money every month as your salary is that you will be able to determine if you are indeed making enough money to pay for all your business expenses and at the same time pay yourself for your efforts. Make sure that you only draw-out the extract amount of money from the business for your salary. Even if your business is doing well and you have plenty of money in the business account, do not be tempted to draw more than you should. Keep the money in the business account for future use. You might want to expand your home business later on. At the end of the year, you might want to give yourself a bonus. If you have been religiously following your own rules regarding your finances, you will be surprised at how much money you will have left in your business account at the end of the year.
Article Source: ArticlesMaker.com
About the Author: Scott Young Is A Plug In Profit Site member As Well As An Authority On Developing Serious Home Based Businesses. Get more Information On How To Build Your Own Serious Home Business. For Internet Business Ideas To Make Money Online, Visit: Serious Home Business Ideas and Opportunities.

Planning an Business Trip

For Business Owners, a business trip can be a valuable tool and tax deduction. Typically however, the business owner gets to tax time and finds out there is a big tax liability due. Then the wheels start turning. "What other deductions have I missed? Oh yes, the family vacation!" Thoughts turn to the family vacation and how it could possibly be construed to be a business trip. The truth is that unless you actually conducted business, after the fact is too late.It is possible to combine a business trip and family vacation, but there are things you should do right to make it legal. Every summer there are seminars and work related trips to be taken and it is fine to take your family along. Be aware that only the business part of your trip is tax deductible. If you drive your vehicle, it doesn't cost anymore in gas to take along the spouse and kids so all the gas is deductible. But if you stop to eat, only the persons involved in the business part of the trip can deduct the meal. If you all stay in one hotel room then it may not cost anymore for the room than if you stayed alone the whole room is deductible. If it costs more for more people in the room, then the extra is not tax deductible. Amusement parks are generally not tax deductible unless you are in a business related to amusement parks. Deductions need to be honest and related to your business field.Here are some things that you should do when planning and taking a business trip.1. Plan ahead. Make a plan of where you are going and what business you will conduct. There are many sources (especially on the internet) that can give you information of the businesses and events in the area you plan to go.2. Business Purpose. Have a specific purpose for the trip. It can include such things as visiting other businesses like yours to see how they operate, making customer or vendor contacts, looking for opportunities for expansion, etc.3. Keep receipts. The key to taking deductions is being able to prove you had expenses. Receipts include the actual sales receipt, checks, credit card statements and bank statements.4. Enlist family members. Depending on the type of business you are involved in, there are times when your family can help gather information and a give a different perspective to the information you gather and places you research. If you ask family members to help, have them write a report at the end of the trip telling their opinions and perspectives. Make sure they tie it into the purpose of the trip.5. Log where you go. Keep a record of the places you go that are business related. A note book or day planner can work. Also an envelope with the log on the front and receipts and information from the places you go inside is handy.6. Log who you talk to. Keep a record of who you meet and what you discuss. Again, a note book, day planner or envelope can be useful. 7. Log what you research. Keep a record of the information you gather.8. Business cards. Keep a business card from the people you meet and the businesses you visit that are business related.9. Keep ticket stubs. Keep the stubs from events such as seminars and trade shows. Note what you learned from thee events.10. Summarize. At the end of the trip write a summary of what you accomplished and the conclusions you made.The IRS looks carefully at business trips. Their purposes and validity can be stretched. By planning ahead and keeping good records, your legitimate expenses can be deducted comfortably and within the IRS codes and rules.
Article Source: ArticlesMaker.com
About the Author: Christopher Anderson is part owner of Lone Peak Business Solutions, Inc. He wants to share his success as a business owner with others who desire to own their own business. Lone Peak Business Solutions has many ways to help you document and legitimize your trips.

The Difference of Getting Paid With a 1099 Verses a W-2

Whenever a business starts there is always the question of how the people that provide services for the business will be paid. Will those services be performed by employees or will independent contractors be used? Before the business can determine how to treat payments they need to know and make clear the business relationship. It is important to establish this relationship because an employee has taxes withheld, social security and medicare matched by the employer, unemployment insurance paid, workers compensation insurance paid and often benefits provided. An independent contractor just gets paid. It is a big expense difference. To determine whether an individual is an employee or and independent contractor, the relationship of the business and worker must be examined. It comes down to does the business have control over what and how a job will be done or do they just control the results of the job. The determination falls into three categories: behavior control, financial control, and type of relationship. Behavioral ControlEmployees are generally subject to instructions about when, where, and how to work. The employer controls when and where the work is performed and what hours the person will be at the job. The person is told what tools and equipment to use, who else can be hired to assist with the work and where to purchase supplies and services. They are told what work is to be performed by a specific individual and what order or sequence to follow. Employees also may be required to receive training by the employer.Independent Contractors can be hired to do a certain job in a certain place and be completed by a certain time. However, how the job is done is up to the contractor. When the work is performed, what equipment is used, who is hired to assist and where materials and supplies are purchased are up to the Independent Contractor. They also obtain and pay for their own training.Financial ControlAn employee is generally guaranteed a regular wage amount for an hourly, weekly or other period of time, even if the wage or salary is connected with a commission. They may be paid whether work is being performed or not. An employee generally does not have an investment in the company unless there are stock options available. They usually have any expenses they incur for things such as travel, phone, or equipment reimbursed. An Independent Contractor is not reimbursed for any expenses. They generally have a business of their own or a significant investment in the facilities and equipment used to perform the work. An Independent Contractor is free to offer services to the general public and can take on jobs for other companies or individuals. They generally advertise their services and maintain a home office or visible business location. They generally get hired and paid by the job, usually a flat fee. Although some jobs can be billed hourly. An Independent Contractor can make a profit or loss on the job.Type of RelationshipAn Employee generally signs a employee contract. The employee is generally provided benefits such as insurance, pension plan, vacation and sick pay. Employee's are engaged for an indefinite period of time. They perform activities that are a regular daily part of the business. They fill out an IRS W-4 form that tells the employer how much taxes to withhold. They are not free to do business for other companies and in fact some companies have penalties if they do.Independent Contractors have job by job contracts or for specific project or periods of time that state they are responsible for their own taxes. They are not provided with any benefits. They fill out an IRS W-9 form telling the IRS that no taxes are required to be withheld.It is important to determine what kind of relationship from the beginning of your business. If you treat an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that person. Also, if you pay an individual as an Independent Contractor, they do not qualify for unemployment of workers compensation so if they try to collect it, you will want to be ready to verify they are not an employee. More information about Employees and Independent Contractor is found in the IRS publication 15A.
Article Source: ArticlesMaker.com
About the Author: Christopher Anderson is part owner of Lone Peak Business Solutions, Inc. He wants to share his success as a business owner with others who desire to own their own business. He also believes that the economy is stronger with more business owners, and as a result, he is focused on helping business owners succeed.

Your Home Business Tax Deductions

If you operate your own home business, then you are probably aware that there a few drawbacks to being self-employed, just as there are a few drawbacks to any major decision you do in your life.Being an entrepreneur and self employed often means that you lose some workplace benefits, such as group insurance, sick leave, paid vacations, etc. However, the government does provide solace balance to those who have an entrepreneurial spirit, and this solace comes in the form of tax breaks, because you the home worker small business owner, are the largest source of employment in America. There are many possible tax deductions for home businesses; you simply have to be well-informed about them to make use of them.There are good reasons for you to go through the trouble? Because you’ll earn more money that way. By knowing all the possible tax deductions, and more, that you can take, you’ll come away with more of the benefits that your business generates, instead of getting cleaned out by the government. When it comes to taxes, make no mistake about it – knowledge is power. The government needs you to have this power to keep it working also so they will help you when they can.If you run a home business, some of the possible tax deductions for you are:Home office costs, such as those that involve office repairs and maintenance. Expenses racked up through janitorial services, for example, when shown to be needed by the business, are deductible, as are waste management and garbage disposal services. Business furniture and equipment may also qualify for deductions in their year of purchase, as long as the amount does not exceed a certain limit. Utility costs, such as electricity and water. The deduction applies to those areas that are used regularly and exclusively for business. Telephone costs. This only applies if you have a separate line for use in business. A single line that is used for both business and personal calls does not qualify. However, if you make long distance calls and/or incur fax transmission fees, those expenses are deductible no matter which type of phone you use. You need to make honest percentage estimates of how much is used and keep good records based on your bills.Rent or lease payments. A percentage of your rent, lease, or mortgage interest payments can be deductible provided that you are using the property regularly for business purposes. Employee wages and employee benefits. If you are an employer of labor, you can deduct a portion of your salary and benefit expenses. Employee education and training costs are also deductible. Education costs necessary in your line of work. This applies especially to professionals. Those who need continuing education to maintain their expertise may deduct the cost of this education from their tax returns. Real estate taxes on business property. A portion of real estate taxes are considered deductible by the IRS. Personal expenses. Some personal expenses, when conducted in conjunction with business affairs, are deductible. A portion of your automobile expenses, meal allocations, and travel and entertainment cots may qualify for deduction, as log as they are related to your business. A final reminder: Try to maintain as accurate records as is possible. Document your deposits, income, expenses and deductions. This way, you will have proof validating your tax deductions. Because tax laws are complex and often changed, it is often advisable to consult a professional. This will allow you to claim as many possible tax deductions for home businesses as you can. Keep a stenographers notebook with separate pages for every deduction you feel you might have coming. Even if you don't know if it is a deduction, for now, record it.The above is very powerful. If you think something might be a deduction, write it in your notebook. Have a CPA do your taxes for you. They cost more but you will get more back and have less trouble with the irs.They will find deductions you did not know you have coming from your possible list of deductions and they will also take off deductions you do not have coming. Some things they will be able to carry over for years in the future.Your CPA will give you tips that will save you time and money and make your business better. They have software that will make your tax work far more efficient. If you get called in for an audit your CPA will do all the talking and you say nothing. I let the IRS call my CPA, regarding my taxes, if they have any questions.You are less likely to get audited directly by the IRS because your CPA has a reputation to keep up and will keep your taxes straight. You will even save the IRS some money because they know your CPA will do better tax work than you.Overseas tax services cannot go to an audit with you. This is a very important benefit of a CPA for you. Even though their charges are less they cannot know your business as well as your CPA to help you with many problems and questions. Buy Americans when it comes to taxes.If you are going to be an entrepreneur the CPA will serve you better than an automatic tax software program and yes the software programs will result in mistakes. By the way, I am not a CPA or trying to sell you any tax services.references; irs, cpa and 40 years of tax record business experience
Article Source: ArticlesMaker.com
About the Author: James M. Lowe writes original articles about home business opportunities.

Your Home Business Budget Foundation

Why a Budget is Important. Let it be your guide from beginning to end. Starting your own home business is a very tricky proposition. Starting your own enterprise is exciting, but it is also inherently full of risk. Enter discipline. Unless you get yourself going on the right foot, then the chances of achieving success are very small. Conversely, as long as you have the right foundation, and keep working on that foundation, success is almost an automatic thing. It is vital that you run your home business on a strict budget, if you aspire for long term success. Strictly budget your time and your money.As little as one hour a day, everyday, is enough to make your personal business get better everyday and grow steadily to keep your confidence up. Avoid distractions. One of the most important parts of running your business is operating on a budget of money and time. Every ad and every supply and tool you buy must earn the value put into it. This is a golden rule that can make you successful as you are going to be at any business.Many men and women, mostly unsuccessful ones, prefer going with the flow rather than with actually setting goals and budgets. For the most part, this attitude is a mistake. Unless you have an incredible memory and unnatural clear sightedness, planning for both the present and the future is a prerequisite to success.No matter how you define that elusive concept. Remember, no sloppy ad, supply or equipment buys. Check everything out scrupulously before putting your hard earned funds into it. Always shop for better prices and quality with every purchase you make. Because this article is about home businesses, we will begin by defining success as the growth and eventual profitability of your particular business. By growth we mean that the business will expand, hopefully outgrowing your home and eventually participating in the corporate arena or whichever one you feel comfortable to work in. By profitability, we mean that the business will become a cash generating machine, so much so that you attain financial freedom, and never have to work a single day again for someone else, if you do not feel like it. You will be your own woman or man. This article argues that in order to achieve growth and profitability, discipline is needed, and plans must be made and acted upon. I cannot harp on and emphasize this enough to you.Crafting your budgetOne of the most important plans you must conceptualize is that of your budget. Many businesses, even if they have great ideas and wonderful products, still fail for lack of proper planning and efficient allocation of resources. Do not let this happen to you. Only a home business on a strict budget can ever be truly successful.First, make it a habit to write down, both what you earn and what you spend, on a daily, monthly, and yearly basis. A common stenographer notebook will be perfect for this. Make a different page for every expense. Every expense and every sale must be recorded so you know where you are everyday.This is the least that you can do.Look over what you have written down and you will easily see the areas that can be improved upon, especially in the expense column. It is astonishing how many expenses we never notice until we get them down in paper. As the business grows larger, accounting knowledge might be needed. If you have neither the time nor the inclination to acquire the knowledge yourself, find someone who does. Second, analyze the figures and determine the areas where you can control costs, and where you should add capital. Every business has areas that generate above average returns, as well as areas that under perform. As much as possible, redirect your resources to the projects and ideas that give you the most return. You will quickly start to learn this from experience.Many years of experience have frequently given me the positive experience of having the lowest cost item or ad working for me best.The great secret here is to, are you ready? Shop around for the best buy and do not let your emotions run wild on you when you read or hear presentations that have wild claims or will not give you the whole detail story until you pay them first. Hah! Never do it. Give me the details or forget about it. You do not need to take unnecessary risks. Lastly, stick to your budget. Never forget this. A plan not acted upon is essentially useless, and a budget not followed is as useful as a page of doodles. Once you have written down and finalized your budget, do not make any departures from it unless absolutely necessary. Always have a solid reason for doing so.Be disciplined. It is the only way you will get anywhere. By running your home business on a focused budget, you are securing your future at a small expense to the present and a nice profit in the future.
Article Source: ArticlesMaker.com
About the Author: James M. Lowe writes original articles about home business opportunities.

The B Vitamins

Vitamins are essential for a healthy body and mind. There is a class of vitamins that are considered B vitamins, and these vitamins are very important to our health. We will examine some B vitamins and how they help our body to stay fit..The first vitamin that we will look at is vitamin B-1, or Thiamine. This vitamin has a very beneficial effect on the nervous system and the mental outlook of a person. B-1 plays an important part in generating energy, helps with the promotion of good muscle tone, helps prevent canker sores from recurring, helps to keep your nervous system healthy, prevents depression, enhances circulation in the body, and assists in blood formation, digestion, and carbohydrate metabolism, among many other benefits.Vitamin B-2 is also known as Riboflavin, and it is an important vitamin for the human body. This vitamin is needed for red blood cell formation, the production of antibodies, and cell growth and respiration. B-2 helps to reduce eye fatigue and prevent cataracts, it aids in the metabolism of fats, carbohydrates, and proteins, and it also helps to promote oxygenation of your hair, skin, and nails. Vitamin B-2 has also been proven to help reduce the frequency of migraine headaches in some sufferers.Pyridoxine, also known as vitamin B-6, is another one of the essential B vitamins. This vitamin may significantly lower the risk of heart disease by slowing down the formation of homocysteine. This is a toxic chemical in the body that attacks the muscles of the heart and allows cholesterol deposits to be made around the heart muscle. This vitamin also helps to maintain normal brain function and the central nervous system. Vitamin B-6 also helps to reduce muscle stiffness, spasms, and cramps. This vitamin is important to all of your muscles. Alcoholic beverages destroy vitamin B-6 in the body.Two other B vitamins are also essential to good health. These are vitamin B-12, or Cobalamin, and vitamin B-3, or Niacin. B-12 helps to form red blood cells and prevent anemia, increases energy levels in the body, promotes a healthy immune system, and helps nerve function, among other uses. Niacin is important to our bodies because it helps to dilate the blood vessels to increase blood circulation and reduce blood pressure, regulates blood sugar, and helps to prevent migraine headaches and mental illness, including depression.The B vitamins are very important to all aspects of your health. It is very important that you are getting enough of them in your diet.
Article Source: ArticlesMaker.com
About the Author: James Brown writes about Puritan's Pride deals">Puritan's Pride deals, Revival Health & Nutrition discounts">Revival Health & Nutrition discounts and Vitamin Shoppe online coupons">Vitamin Shoppe online coupons

Ten Commonly Missed Tax Deductions For Businesses

There is nothing worse than preparing Income Taxes and finding that there were many deductions we didn't keep track of. Not keeping track of deductions can be very costly come tax time. It is very important to keep good records all year round.For every dollar you don't deduct, you could be paying up to 35% back to Uncle Sam. If the dollar has been spent, taxes shouldn't have to be paid on it. Think of the productivity of your business if you could put 35% of your income back into your business rather than in the hands of politicians. What kind of advertising campaign could you do with 35% extra cash flow every month. With a little organization and planning this can be possible.Most business owners remember to take the big obvious deductions such as cost of goods sold, materials, tools, supplies, and employee expenses. But often times it is the small seemingly insignificant deductions that can make or break a company. Lone Peak Business Solutions has the 10 most commonly missed business deductions.1. Advertising - Business cards, newspaper ads, information packets you hand out, free samples, flyers, product testing, videos and CD's.2. Children - Money paid to children for helping with such things as delivering flyers, product, stuffing envelopes, cleaning office and car, etc.3. Dues and Subscriptions - Dues to professional organizations and magazines that have to do with your trade or business.4. Educational Expense - Classes or seminars that you take to improve your business.5. Gifts - Gifts to clients and associates.6. Laundry and Cleaning - This includes uniforms and Protective clothing and also your clothing when you are out of town.7. Travel - Hotels, airfare, cab fare, parking, cleaning while away from home, trip log.8. Home Office - A home office must be a separate room in your home to do business and accounting. Part of your living room or bedroom will not count. A percentage of utility Bills, home owners insurance, property tax, mortgage interest, refinance fees, repairs and maintenance, cleaning supplies, office decor, etc. are deductible. You find out the percentage by dividing the square footage of the office by the square footage of the entire house.9. Mileage or Vehicle - There are two ways to take a vehicle expense. One is to take the mileage you use when picking up product, supplies, office supplies, meetings, handing out advertising or business cards, meals and entertaining clients, etc. The other way is to take the expense of using the vehicle: fuel, parts, mechanics, oil changes, etc. Along with taking expenses, you can also depreciate the vehicle.10. Telephone - Cell phone, long distance calls on home phone, extra phone lines into home for business, fax or Internet.Items such as paper clips, bank charges, credit card charges and home office expense seem small and unimportant at the time, but multiply those little things over a year or two and then multiply it times 35% and it can add up to quite a bit of money that should be in your pocket rather than in the government's pocket. Along with keeping track of expenses it is important to evaluate your income and expenses on at least a quarterly basis. This allows you to determine if too much is being spent any one place. It allows you to determine if all the deductions that can be are being claimed. It allows you to determine how to better increase sales and decrease costs.
Article Source: ArticlesMaker.com
About the Author: Christopher Anderson is part owner of Lone Peak Business Solutions, Inc. He wants to share his success as a business owner with others who desire to own their own business. He also believes that the economy is stronger with more business owners, and as a result, he is focused on helping business owners succeed.

Safeguarding Tax and Financial Records

The IRS recently published a newswire urging people to safeguard their records. IRS Acting Commissioner, Kevin M. Brown stated, "With forecasts calling for an active Atlantic hurricane season, the IRS encourages taxpayers to protect tax and financial documents that can be hard to replace." (Newswire dated June 1, 2007) Actually whether or not you live in a hurricane area, there are many things that can happen to destroy important records. We all think about big natural disasters such as hurricanes, tornados, earthquakes, etc. But there are other disasters that can affect anyone no matter where you live. They include such things as fires, flooded basements, theft, accidentally throwing things away, etc. If you happen to get audited, the IRS doesn't particularly care why you no longer have your records and they will go off the records they can gather. The IRS can provide you with W-2 information, income from interest, dividends, stock sales, 1099 information, interest paid on government student loans, and how much mortgage interest you paid to a financial institution. They don't have records of business deductions, donations, dependents, alimony paid, daycare expenses, medical expenses, etc. There are several ways you can choose to keep your records safe.1. Paperless Record keeping: With the wide use of computers, internet bank records, W-2 forms, and other documents can easily be downloaded to your computer. Other documents can be scanned in. This can then be saved onto a USB drive as a back up which can be store in a safety deposit box and/or sent to a relative in another city.2. CD or DVD: Records can be scanned into the computer and burned onto a CD or DVD. Several copies can be made inexpensively and stored in several places.3. Record Keeping Companies: There are companies that will copy and keep your records in their vaults so that in the case of a disaster they can provide you with a copy. 4. Protective Boxes and Safes: You can purchase fire proof and water proof boxes and small safes to keep valuable records in. They can work well if you don't live in a place were place where a natural disaster will likely take down the entire house. Other items you may want to document and keep safe are personal records such as birth certificates, social security cards, passports, insurance documents, home closing documents, and investment documents. In large disasters, it is important to be able to prove who you are and that your children belong to you. If your home is destroyed you may need to prove ownership. There once was a family of eight. One evening the whole family went to the local pool for an evening of swimming and fun. They were gone about two hours and when they arrived home, their home was on fire. The fire department was there and the neighbors had all been frantically trying to find them. The plug on their toaster had shorted out and started the fire. It was a small fire that was quickly contained, but the fire department wouldn't let the family go in until they were sure everything was safe, which took a day. They stood there with nothing but their swimsuits and towels as neighbors ran to their homes to find clothing and diapers so the family could at least get dressed. When they were finally able to enter their home, the smoke had damaged everything. They spent a week in a hotel until the insurance could make arrangements to find temporary housing, Then came the task of listing all the things that had been destroyed and working with the insurance company to fix their home and replace the contents. This was a relatively small disaster as disasters go. But it could happen to anyone. In any disaster it is good to have a record of your personal belongings, especially items of greater value. Photographing or video taping the contents of your home can be a great help when filing an insurance claim after a disaster. Also, if you do not have insurance to cover losses, they can be deducted on your tax returns. Recording what you have, when you purchased it and what you paid for it can also expedite claims. The IRS has a free disaster loss workbook that can help individuals and businesses compile a detailed list of belongings. The IRS publication 584 is for individuals and the publication 584B is for businesses. Nothing can take away the pain and trauma of a disaster, but being prepared can make the recovery process much easier. Review your emergency plan annually. Make sure records that have been safeguarded are current and up to date. Being prepared takes much of the worry out of life.
Article Source: ArticlesMaker.com
About the Author: Christopher Anderson is part owner of Lone Peak Business Solutions, Inc. He wants to share his success as a business owner with others who desire to own their own business. He also believes that the economy is stronger with more business owners, and as a result, he is focused on helping business owners succeed.

Sunk Costs and Loss Aversion

Sunk costs are usually defined as previously incurred costs that are not recoverable and should not be taken into account in decision making. Here is a slightly modified example of a sunk cost from Jerold Zimmerman's "Accounting for Decision Making and Control" (Irwin McGraw-Hill): Example. Abadabba Berman, the comptroller of the Schultz Cement Shoe Company, has contracted with Microstiff to design a proprietary accounting software package for the company at a cost of $15,000. After months of dealing with countless glitches and bugs the system just barely works. Finally one of the frustrated bookkeepers points out to Abadabba that for only $2,000 they could purchase an off the shelf package from Quickcrooks that would generate all the reports that the more expensive system provides with a fraction of the aggravations and crashes. Abadabba cannot bring himself to invest the additional $2,000 in the replacement system even though the company will easily save that much and more in the improved productivity of the accounting department. Abaddaba reasons that they have too much invested in the old accounting system to simply abandon it.Abaddaba should consider the past investment in the expensive Microstiff software a sunk cost. He should ignore the past investment in deciding whether to abandon the software and replace it with the Quickcrooks package. According to cost accounting theory the only relevant costs to consider are the future costs associated with each option. If retaining the Microstiff software is more expensive going forward than buying the Quickcrooks package then the Microstiff software should be abandoned. The previous heavy investment in Microstiff should not be a consideration in making his decision.Loss Aversion: Why Abaddaba Won't Let Go of Microstiff According to cost accounting theory Abaddaba's choice to hold on to Microstiff is irrational. The best choice for the company is to abandon the software, not keep it. Now of course, the irrational choice for the company may be a very rational choice for Abaddaba personally. Why? Because the boss of the company, Dutch Schultz, has a notoriously bad temper and Abaddaba does not want to face Dutch's wrath when he tells him that he made a $15,000 mistake going with Microstiff. So from Abaddaba's perspective it is rational to cover his rear and stick with the bad software.But this is not really the full story because even if Abaddaba was the owner of the firm the odds are that he would still make the irrational choice to stick with the crummy software. Why? Because he, like all of us, tends to be very reluctant to accept losses. Abaddaba's failure to treat the prior investment as irrelevant is a species of a very common behavioral trait known as loss avoidance.Varieties of Loss AversionFor most people losses loom larger than gains. The pain we feel from a loss generally outweighs the pleasure we feel from a comparable gain. This is what the social scientists term loss aversion. Variations of loss aversions are common place in business and investing. For example, investors are, as a rule, much quicker to realize gains than losses. This is the reason why automatic stop loss orders are implemented when buying stock. An automatic stop loss triggers a sale when a stock investment's price drops to a certain point. It is automatic and commonly used because it is the all too human trait of loss aversion that often keeps people from cutting their losses. The tendency is for people to hold on to losers in the hopes that the loss will reverse. Real World DecisionsIn the above example all the consequences of the different courses of action were specified. I told you what the dollar consequences of keeping the old software versus buying new software would be. Rarely in real world situations do we have precise dollar estimates for the results of different courses of action. The tendency to stick with losers, and thus not cut our losses, can be reinforced by the ambiguity surrounding real world decisions. If you are in a position of being emotionally invested in a bad decision, the tendency will be for you to filter out and skew data that would support abandoning the course of action you are invested in. Practical Advice on Dealing with Sunk Costs and Loss Aversion First recognize that there is no way to detach yourself emotionally from the consequences of important decisions that you have made. Recognizing that you have made a poor important decision is always going to be painful. What you can do is recognize that you have an emotional investment in your decisions and seek the advice of individuals who are not so emotionally invested. These individuals are less likely to filter out information that might call for abandoning a bad investment. So who can you consult with about important decisions? If you are a small business owner it is important to have an outside advisor. Outside accountants, Small Business Extension Center staff, or volunteers from S.C.O.R.E are all good possibilities that will not break your budget. Trade or business associations often have staff available for advice on business operations. Also do not overlook the web as a possible resource of good advice. Almost every type of industry or business has forums where similarly situated owners can offer each other advice. For larger businesses, independent boards of directors can fulfill the role of detached advisors as well as outside consulting specialists. Also remember loss aversion and the unwillingness to abandon sunk costs can exhibit itself in groups as well as individuals. Finally, do not forget that even the smartest people make mistakes and often very big ones. Ignoring non-recoverable costs requires admitting that we have made bad decisions. Never an easy thing to do. But the ability to admit mistakes, abandon sunk costs and move on is vital to success in any enterprise.
Article Source: ArticlesMaker.com
About the Author: Michael Sack Elmaleh is a Certified Public Accountant and Certified Valuation Analyst. His book, "Financial Accounting: A Mercifully Brief Introduction", has received wide critical acclaim. He has nearly 30 years of accounting and 10 years of teaching experience.His web site is understand-accounting.net

How CPAs Can Help You File Your Taxes

With March rolling in, the tax season moves into focus yet again. All the organizations and entrepreneurs take to preparing and filing returns and getting the tax deductions and rebates. A tax payer has a number of tax preparation options like self preparation and filing of taxes or taking the help of hired services of a trained and experienced tax professional. With March being the end of financial year, there is a lot of stress on the businesses to get all their finances in order. At such a time, where an entrepreneur has to keep an eye on almost all the nooks and crannies of the business, the businessman usually opts for a hiring a tax preparer. They are usually employed with bigger tax specialist consultancies like Jackson Hewitt. However, there are other big and small consultancy companies as well.Another option for taxpayers is the accountant who not only helps in preparing and filing taxes, but also looks after the Book Keeping of the organization. Businessmen who have complicated financial accounts are more likely to hire the services of an accountant than the others are. While choosing an accountant, the main focus is always on the accountants qualification, training and experience.On the basis of training and experience, accountants can be categorized in two categories, regular traditional accountants and Certified Public Accountants (CPA). A CPA is required to meet certain requirements laid down by the AICPA or the American Institute of Certified Public Accountants, including passing the CPA exam and taking a set number of college credits before being certified. CPAs are likely to charge their clients more because of their extensive training, but for the very same reason they are also the best people to handle the delicate issues and implications of finance. The only disadvantage of hiring a professional tax preparer is that for their services, they are likely to charge a large amount of money. A majority of professional tax preparers charge their clients on the basis of number of federal and state tax forms that are to be filled and the complexity involved in preparing them. For this very reason, many small time businessmen believe in filing their own taxes.There are a number of tax preparation options if a businessman decides to prepare and file his own tax returns. Until now, individual taxpayers who file their own tax returns relied on paper tax forms, but not anymore. With the advent of online tax software, the taxpayers are very relieved because it not only helps to file but also prepare the tax return correctly. Tax software programs are readily available in most retail stores and even online. The software is equipped with a mathematical checker that helps in preventing errors from being reported in the tax returns.Tax preparer software is designed in such a way that not only does it help in allowing an individual to prepare and file tax accurately and quickly, but also transfers the information from one source to other. The tax software programs come in three versions standard, deluxe and premium, with the premium and the deluxe version including both federal and state tax return forms. The standard version includes only the federal tax return forms.
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About the Author: Former IRS Agent offers California Estate Planning. CPA Firm Murrary and Young offers expert accounting consultation to those in and around the California Area. Visit http://www.april15.com

Find an Enrolled Agent for the Best Assistance in Tax Preparation

An Enrolled Agent can represent you before administration regarding tax matters such as audits, collections, and appeals.What is an Enrolled Agent?An Enrolled Agent (EA) is a tax practitioner who has expertise in tax preparation and is authorized by the U.S. Department of the Treasury to represent taxpayers before the Internal Revenue Service (IRS).Enrolled Agents are authorized to advise and prepare tax returns for individuals, companies, estates, trusts, or any tax paying entity. The IRS authorizes a person to be an EA only after stringent tests and background checks.Enrolled Agents are required to undergo a continuous education program. They must attend 72 hours of continuing professional training every three years in order to maintain their status as Enrolled Agents. It requires patience, determination, and perseveration to attain the status of an Enrolled Agent and to retain that status. There are only 46,000 Enrolled Agents in the whole country.What is the difference between an Enrolled Agent and an Attorney?It is only the Enrolled Agents that regularly prove their competence before the IRS. All EAs specialize in taxation and they are the only true tax payer representatives authorized by the federal government. Certified Public Accountants (CPAs) and attorneys too are licensed, but by states.Enrolled Agents also have a client privilege albeit on a controlled level. This privilege allows confidentiality between a tax payer and an EA. It is applicable to EAs bound by the Department of the Treasury's Circular 230 regulations.If you are a tax payer, you may want to get assistance from professionals bound by the highest professional and ethical standards, and who pass the stringent qualification requirements set by the Internal Revenue Service (IRS).There are only 46,000 active Enrolled Agents in all of the fifty states. The easiest way to find an Enrolled Agent based on your specialization requirement and close to your location is to use an Enrolled Agents directory.Getting assistance from an Enrolled Agent ensures that you will have perfect standing before the IRS. An EA will look into the matters of fair taxing. Since the IRS requires stringent adherence to professional standards, you can get tax preparation services or representation that meets the highest professional standards.TheAccountingPlanet.com has an extensive listing of Enrolled Agents which will allow you to quickly find a federally-authorized tax representative to handle your taxes and represent you before the different administrative levels of the IRS.Here you will find a comprehensive list of accounting and tax professionals. This simple-to-use website is the best place to find accountants and Enrolled Agents for all of your tax and accounting needs.Who can use this directory?Any individual tax payer, small business owner, corporation, estate owner, business owner, trust, partnership, or other entity that is bound by tax reporting requirements can make use of this directory.This is a search-based directory that allows you to find tax practitioners by entering the city, state, and/or zip code. Using TheAccountingPlanet.com is free for tax payers. Accounting and tax practitioners listed in the directory pay a fee. A visitor can quickly find an Enrolled Agent in his or her city.
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About the Author: Enrolled Agent

If You Are Considering A Career In Accounting There Are A Lot Of Choices

Accounting careers open the door to an entire world of options. You can choose from many different types of careers and opportunities. And once you settle on which career or opportunity you'd like to pursue. you have a world of options for which company you want to work for. Hence, you have variety in what you do and where you do it. Regardless of the wide amount of diversity in where to work and what to do, most accounting careers do hold one thing in common: as a general rule, they keep track of what the company makes and spends.This is the starting foot for where you decide to go (accounting holds opportunity for job advancement). You may even decide to stay where you're at, but there usually is room for advancement. As you pursue this advancement, you gain more and more responsibilities. As you gain more responsibilities, you acquire new titles!Titles are sometimes interpretive, as they can represent different jobs from one end of the spectrum to the next. For instance: an accounting clerk could mean anything from somebody who is a filing clerk (which means somebody who files documents pertaining to accounting), to a receptionist (who does the same similar types of tasks).With all the talk of career advancement, you may be wondering what some options are. Staff Accountant, Controller, and CFOS are more predominant accounting careers, though there are many more beyond just them.Staff Accountants jobs vary based on company size. If the company is smaller, they generally have the Staff Accountant perform a variety of tasks. They keep record and track of activities done day-to-day. They also may apply cash to invoices, pay the company's bills, and bill customers. If, however, the company is larger, they generally have clerks do much of the above-mentioned work, in which case, the clerks give the results to the Staff Accountant to be further reviewed.Controllers generally oversee the entire accounting department. The Controller also makes sure tax information is accurately completed, sometimes with help with other accounting departments. They do this, and make predictions based on the history of the accounting records and on how well the company will do.The Corporate Financial Officer or, "CFO" oversees the accounting department, and sometimes the finance department.There is so much room for advancement when choosing a career in accounting from being a Staff Accountant, a Controller, or a CFO that pursuing accounting is a very wise choice. Even if you decide not to further advance your career, a stable career in accounting may just be right up your ally. With all this in mind, you will wonder why you did not consider accounting sooner.
Article Source: ArticlesMaker.com
About the Author: Gregg Hall is an author living in Navarre Florida. Find more about this as well as Small Business Accounting Software at http://www.accountingsoftwareplus.com

The Rewards of A Career In Accounting And Why You Should Consider The Vocation

Now, more than ever, a career in accounting is something you should take the time to consider. Accounting is leaving its reputation for providing long days of mundane work in the dust as the amount of duties and tasks it offers varies more and more, leaving the door wide open to many other, bigger and better opportunities.One way accounting is waving goodbye to its boring reputation, is through moving their once self-done work to the computer. By working via computer, what they do varies even more on a day-to-day basis, and makes their line of work far more interesting than before. For instance: in the past, accountants had to do lots of adding, subtracting, recording, and tallying. They would spend the day tallying figures and filing data. But now, with the advancements of computers and calculators, the data is already calculated, and faster and easier to store and access, so they are doing different things now than what they are generally associated with.Accounting can lead you to a career in several types of different companies. This means that there are plenty of options pertaining to where you end up working. It can also land you in a variety of firms. Once you enter a company or firm, there are different types of jobs you can do, all because of your decision to pursue accounting!If you are pursuing an accounting degree, rest assured that accountants are hired in entry level jobs quite often, so it will not be hard to find somewhere to at least start out.In almost any career, it is good to have a starting point. A career in accounting may be a good starting point for you to consider (if you need a starting point), as It is a good stepping stone to more prestigious careers. Otherwise, continue to pursue the field of accounting. Different types of accounting are popping up as new problems arise (one of these could be the prestigious career you pursue). For instance: One company may notice a discrepancy in their budget. To resolve this issue, a forensic accountant may be called upon to help figure out what is going on.There are also many job perks which come hand in hand with accounting. Accountants are generally well compensated. Their hours are good. They receive attractive benefits. All that combined with the fact you can take your accounting career even further, and you start to wonder why you are not in accounting already.With all of the benefits, opportunities, advancements, and yes fun, accounting has to offer you, it is a great career to pursue. If you consider all the wonderful things it can offer you, you will realize that getting a career in accounting just all adds up.
Article Source: ArticlesMaker.com
About the Author: Gregg Hall is an author living in Navarre Florida. Find more about this as well as Accounting Software Plus at http://www.accountingsoftwareplus.com

Outsource Accounting to Boost Your Bottom Line

Business is composed of a set of interrelated systems that ensure the smooth flow of business processes and convert capital to revenue efficiently. It is important for a business owner to consider each component as if it is just the existing system inside the process. Thus, utmost importance and consideration must be given to each process component, which includes the accounting process. That is why we have tax lawyers. That is why we have public accountants. That is why we have financial managers. It is because of the accounting process. It is the measurement and the disclosure of essential financial information that will help public accountants, financial managers, tax authorities, investors, and other decision-makers to effectively allocate their financial resources to each business process, thus maximizing the conversion of a business' working capital to huge revenues.Accounting involves processes in which important financial information of a particular business is recorded, summarized, evaluated, and interpreted. Furthermore, since money is one of the biggest factors that may affect the existence of a business in a certain market, accounting is given utmost attention and consideration at all times.In accounting alone, there are several aspects that a business owner must consider. There you have the cost accounting, the cash-basis accounting, financial accounting, internal fund accounting, management accounting, project accounting, and others. And the list continues to expand. In other words, you might conclude that accounting is a serious and a critical matter that must be handled by a group of people who have the technical expertise in dealing with the accounting as well as financial issues. Realizing this reality, more and more business organizations hand the accounting aspects of their business process to third-party organizations, or most commonly known as accounting outsourcing. Accounting outsourcing is considered to be one of the more effective management tools, thus many companies often incorporate outsourcing as one of their strategies in business planning. As a matter of fact, the Outsourcing Institute reported that the concept of a CRO (Chief Resource Officer), a professional outsourcing executive manager, is widely-acceptable in larger corporate organizations.However, you need not be a large corporation to benefit from accounting outsourcing. Even small and medium-sized enterprises can provide better service and produce high-quality products in a more cost-efficient way if they outsource their non-core business processes. This includes the accounting aspect.By decreasing the demands on your administrative personnel, you will be able to free them from additional responsibilities and they will be able to support areas directly to your sales, clients, and to the marketing task of your business. Accounting outsourcing firms can execute your accounting and bookkeeping tasks in all frequencies (monthly, quarterly, and annually) or can supplement your present administrative staff to lessen the responsibility. Here is a summary of the services you can acquire from outsourcing your company's accounting process:- Preparing cash disbursement checks;- Preparing input credits and bank deposits;- Preparing company payroll;- Preparing tax deposits and bank reconciliation;- Preparing financial statements;- Preparing payroll tax returns; and- Evaluation and review of financial results on different frequencies. With accounting outsourcing, you will be able to see the benefits of having a cost-efficient business operation. With your accounting process at the hands of outsourcing professionals, you can focus to the core of your business and convert every cent of your working capital into hundreds to thousands of dollars in generated revenues and profits.
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About the Author: Premier solution for outsource graphics, marketing and web services Web marketing services. http://www.raxsolutions.com More outsource strategies to boost your profits Outsourcing guide. http://www.outsourcehandbook.com

Accounting Equation in the Real World

A companys financial position indicates the amount of resources that they have, and also the claims against those precious resources at any time. Claims can also be referred as equities. So, a company can be known as a combination of economic resources and equities. Economic Resource=Equities. No mater what type of business your in, every type of company has two different types of equities. They are creditors equity and owners equity. In another way Economic Resources= Creditors Equities +Owners Equity. When using accounting language, the economic resources a company has at a particular time is called their assets? On the other hand the amount of creditors equity a company has is known as their liabilities. So here is the standard equation of accounting or better known as the accounting equation: Assets=Liabilities + Owners Equity. Similar to an algebraic equation, both sides of the equation has to be equal. This equation comes in handy when analyzing the financial effects of your everyday business activities. Lets talk about a very important concept of any business. Assets are known as the economic resources that a business has that are expected to generate money for them in the future. Some examples are real estate and any other property that a business own so that they can rent out to people. If a business is owed money than it goes into what is known as accounts receivable which are monetary items. However, there are some assets that are not physical. Some examples are copyrights, trademarks, and patents, but they are still extremely valuable to a business. Next, liabilities are the obligations that a business has such as paying cash, provide future services to individuals, or transferring assets to another entity. These are known as the debt of a business or the money that they have to owe in the near future. All of these are recorded in the accounts payable.As Im sure you know, having a lot of debt is not fun and liabilities/debt are claims that are seen by the law. The law gives creditor (People that money is owed to) the right to push the sale of a companys assets if they dont pay their debt on time. Creditors have a ton of rights over owners and they have to be paid in full even before the owners receive anything. It is very possible for a debt to consume up all a companys resources. Next, owners equity refers to the claim that owners of a business make in regards to the assets they have. It is the residual interest or the remaining assets of a company after deducting the amount of entity liabilities. Here is the equation for owners equity. Owner equity=Assets-Liabilities. The owners equity within a particular corporation is referred as stockholders equity, so the equation then looks like this. Assets=Liabilities +Stockholders Equity. The stockholders equity has two distinct parts which are the contributed capital and retained earnings. Stockholders Equity=Contributed Capital + Retained Earnings. The amount than an individual stockholder puts into a business is known as the contributed capital. Contributed capital is usually divided into two separate parts known as par value and par value and additional paid in capital. The retained earnings are the amount of equity that is earned by stockholders from the income generating activities of a business that are kept for future uses by a business. Retained earnings are affected by three types of transactions which are revenues, expenses, and dividends. The increase and decrease in a stock are known as revenues and expenses respectively and these come from operating a business whether online or offline. If you're online than an operating expense that you will have if you have your own website is your domain name and hosting service. Another example is if a customer agrees to pay you in the near future for a service that the company will perform. The money is recorded in the accounts receivable (asset account) which increase the asset value but decrease the stock holders equity amount which is an example of revenue. However, if a company promises to provide a service in the future than this is known as an expense. When this happens the assets decrease (accounts receivable) and the liabilities (accounts payable) is increased, which makes pretty good sense right? When the revenues exceed the expenses this is known as the net income which is good, and on the other hand when expenses are greater than revenues than this is known as net loss which means that you're losing business or your business costs more to operate than what you make. Dividends are the distribution of assets to stockholders which refer to the past earnings. Do not confuse expenses with dividends, because they both are reducing the retained earnings amount. Retained earnings are the collected net income or revenues minus expenses. The financial statements are the main way for communicating information about a business to those who have some type of interest in it. What helps me is to think of these statements as a type of model for business because they show how a business is doing in financial terms. However, like a variety of methods and models, financial statements are not perfect and have their flaws. There are four main financial statements, and they are income statement, the statement of retained earnings, the balance sheet, and the statement of cash flows. What the income statement does is summarize the revenues earned or the money made, and the expenses or the money that is deducted from a business. Many accountants consider it the most important financial report because it makes it clear whether a business has met its profitability goal. The next one is the statement of retained earnings, and it displays the retained earnings over a period of time. The time that the retained earnings will be zero is when a company first started out in their accounting period. A lot of companies use the statement of stockholder equity as a substitute of retained earnings. This is a more detailed statement because it displays not only the aspects of retained earnings but it also shows the changes in the stockholders equity accounts. Next, the financial situation of a business on a particular date, usually on the end of the month or the year is the balance sheet. The balance sheet displays the value of a business according to their assets and the claims against those assets which are the liabilities and the stockholders equity. Last, the statement of cash flows is geared towards a companys liquidity measures. They are basically the flow and outflow of cash in a company. The net cash flow is the subtraction between the inflow and outflow of money. The statement of cash flows also display the money generated by simply operating a business, and it also displays the investing and financing transactions that occurs during a particular accounting period.
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