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Tuesday, May 2, 2006
Subject: 10 Reasons Why You Need a Strong Business Plan
Time: 3:58:22 PM EDT
Author: sloppyfrogg
10 Reasons Why You Need a Strong Business Plan
A business plan is the cornerstone of starting a business as well as a significant tool for monitoring the progress and growth of your company. Below are ten key reasons why you should have a business plan.
1. To Attract Investors: Before investors can decide whether or not to back your business financially, they will need to know as much as possible about how the business will operate and how their investment will be spent.
2. To See if Your Business Ideas Will Work: By writing a business plan and outlining each aspect of your business, you can determine if your idea is actually viable.
3. To Outline Each Area of the Business: A business plan will provide an overview of all aspects of the business. You will be able to detail the who, what, where, when, and why of your day-to-day business operations, costs, and projected profitability.
4. To Set Up Milestones: By forecasting where your business will be in six months, one year, or five years, you are not only letting potential investors know your plans, but also setting up realistic milestones for yourself and your employees.
5. To Learn About The Market: Researching, analyzing, and writing about the market not only provides you with an overview for the business plan, but gives you greater insight into the overall market.
6. To Secure Additional Funding or Loans: Your business plan can demonstrate that you have met goals and illustrate the company’s growth and need for additional funding.
7. To Determine Your Financial Needs: The process of writing your business plan will force you to analyze your financial picture.
8. To Attract Top-Level People: Your business plan will give talented people an overview of your business.
9. To Monitor Your Business: A business plan should serve as an ongoing business tool that you can use to monitor your progress.
10. To Devise Contingency Plans: While business plans often include some contingency plans, by virtue of having the document available, you can see how and where you can make such changes relatively quickly if, and when, necessary.
In addition, make sure to read these articles:
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Thursday, February 9, 2006
Subject: Basic Bookkeeping Tips
Time: 11:18:11 PM EST
Author: sloppyfrogg
For many small businesses, the most common bookkeeping errors are also the easiest to fix. Use these six tips to help keep your business on sound financial footing.
- Use the right accounting system. Most businesses use either cash-based or accrual-based accounting. If you use the cash method, you count income when you receive it and expenses when you pay them. Under the accrual method, you count income and expenses when they happen, not when you actually receive or pay them.
In practical terms, this difference in timing is relevant if your company keeps inventory on hand or handles transactions on credit. In these cases, the accrual method might be a better choice for your business. And in fact, if your firm has more than $5 million in sales or keeps an inventory, the IRS might require that you use the accrual system. In other cases, however, the simpler cash system could be all you need.
- Maintain daily records. This is one of the most basic rules: If you don't keep accurate daily records, you don't have an accurate way to track the financial condition of your business. Different people use different record-keeping systems; what matters is that you have one and use it every day. Once you have a good system set up, accurate record keeping will take just a few minutes a day.
- Handle and review checks carefully. It's easy to be on autopilot when you're writing checks and tossing canceled ones into a filing cabinet without reviewing them. Remember: Those checks are as good as cash. And if something goes wrong, you — not the bank — will be on the hook.
Take the same care with checks as you would with cash. Sign checks using a clear, distinctive signature that won't invite forgery. Review canceled checks before anyone else, including your bookkeeper or employees, sees them; that way you can catch unauthorized checks. And if your business is a partnership, it's a good idea to have at least one of the partners co-sign the checks.
- Get a bank statement with a month-end cutoff. This is another basic tip that can reap big rewards. Synchronizing your bank statement with other monthly records will make it much easier to reconcile your statement and track expenses.
- Leave an audit trail. Your record keeping will be much more effective if you have a system that allows you to quickly and easily retrace your company's financial activities. This means keeping your invoices and checks in numeric order, not skipping check or invoice numbers, and keeping separate bank accounts for your business and personal funds. If you can't go back a year and reconstruct your company's finances, you probably aren't leaving an effective audit trail.
- Use a computer. Computer bookkeeping software is absolutely essential for all but the smallest businesses. These applications make it easy to track income and expenses, prepare tax documents, summarize your company's financial activities and back up records for safekeeping. If you're working with an outside bookkeeper, make sure they know how to use a computer.
In addition, make sure to read these articles:
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Subject: Business Accounting Software
Time: 11:16:54 PM EST
Author: sloppyfrogg
Powerful accounting software solutions help small and large businesses function more effectively and ease the process of billing clients, paying bills, and financial reporting. AllBusiness has pulled together a selection of business accounting articles from our Business Periodicals section:
EXECUTIVE SUMMARY
- SHOPPING FOR ACCOUNTING SOFTWARE is difficult. The software must be just the right size, it shouldn't contain more or fewer features than you need and you should feel secure that its publisher will be able to provide upgrades and fix bugs as needed.
- IT'S NOT ENOUGH TO EXAMINE the package's specifications and understand its myriad features; you must have both a comprehensive and intimate understanding of your organization's business operations and the various processes that it uses.
- IF YOU DO THE JOB CORRECTLY and diligently, you'll discover you're developing a far more comprehensive and detailed picture of your organization than you imagined possible, and that will give you the opportunity to create a business that runs better. Read more. »
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Putting your money matters online: ten important questions about Web-based accounting systems.From Association Management: March, 2005 issue
Board members demand transparency in financial statements and benefit from access to timely information. Staffers want easier ways to process transactions, such as publication orders, meeting registration fees, and dues payments. Chapter affiliates want reports faster. Think ofall the accounting functions your association handles daily: budgets, order entry, dues, expense reports, accounts receivables and accounts payable, asset management, payroll, chapter or affiliate reports, and investments. You wonder how it all gets done. Read more. »
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ePartners compares 3 Microsoft accounting solutions: which is best for your dept.?From Accounting Department Management Report: April, 2004 issue
When controllers and other ADMR readers at small and middle market companies want to upgrade their accounting software, Microsoft is the 800-pound gorilla they cannot ignore. Reason: Microsoft owns Great Plains, a software solution for businesses with up to $1 billion in sales that has more than 10,000 installations. Further, Microsoft has products flanking Great Plains. These are Solomon, which boasts more than 2,000 installations, and Axapta, which claims more than 3,500 installations, a majority in Europe. Read more. »
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Backing up your accounting data.From The National Public Accountant: Oct, 2004 issue
In my opinion you can never backup your accounting data too often. I'm always surprised when I realize that people are not backing up their files. I recommend that you backup your data whenever you have entered more data than you would like to re-enter! Sounds simple—right? All accounting programs usually have a backup procedure. In QuickBooks and Peachtree you can find the backup utility under File. Read more. »
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Billing is critical to a firm's survival.From The National Public Accountant: August-Sept, 2005 issue
I'm reminded of a commercial in which a business owner comes out of his office to see his employees acting strangely. He tells himself he needs to spend more time with the business and less on administration.
What a lesson for accountants and so on point when it comesto time and billing. Time spent generating bills is time away from working with clients and staff. While billing is critical to a firm's survival and management, it must be accomplished with minimal disruption to the business. Read more. »
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Common mistakes in QuickBooks.From The National Public Accountant: Oct, 2003 issue
QuickBooks is one of the most flexible accounting programs I've had the pleasure of using. You can customize it to fit almost any type of business. Perhaps because it is so flexible, or due to advertisements that state you don't need any accounting experience to use QuickBooks, many users do have problems. There is more to it than simply entering transactions in the check register. After working with hundreds of customers' QuickBooks files, there have only been a few (really only 3 or 4) that I have not been able to correct. Here are some of the more common problems I've encountered. Read more. »
- Four key issues affect accounting software for mid-market companies, according to new research by Aberdeen Group. These issues, which ADMR readers should consider when their companies shop for new accounting systems, are: Integration problems plague mid-market software. Software sold to mid-market businesses ($50 million to $1 billion in revenue) often requires data re-entry. Says Aberdeen: “This ensures loss of productivity and increases chances for error.” Read more. »
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Subject: What Do You Need to Know about Deductions?
Time: 11:15:04 PM EST
Author: sloppyfrogg
As an employer, you are responsible for calculating and deducting the correct amounts from your employees' paychecks. Doing your homework in this area is a necessary evil that will pay off in terms of avoiding penalties and other troubles with tax authorities.
Payroll deductions cover a wide range of items such as federal, state and local income taxes. Rules vary from time to time and state to state, so it is important to keep abreast of new IRS and state government mandates. Who pays the deductions also varies — some deductions are paid by the employer, some by the employee and some by both.
Both the employee and the employer contribute to Medicare and Social Security. Make sure your business adheres to the correct payment schedule (quarterly, monthly or semiweekly), which varies according to how much your business collects in employment taxes.
Employers pay for federal unemployment insurance, which funds the federal unemployment program.
State unemployment insurance is a tricky area. Some states view this solely as an employer tax, meaning you do not have to deduct this amount from payroll. Other states impose this tax on employers as well as employees. The same goes for workers' compensation insurance, which also depends on what type of business are you in.
Related Articles
State and local tax liabilities are just as complicated — if not more so. Start by recognizing that not all states require withholding of state taxes and not all states have local taxes. Things get even more complicated if your business operates in more than one state or if some of your employees live in one state and work in another.
Payments for disability insurance also vary widely according to the state in which you operate. Employers and employees share the responsibility differently in different states.
Since deductions vary from state to state, be sure to check with your tax advisor or state and local tax authorities to determine your specific deduction requirements.
In addition, make sure to read these articles:
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Subject: Tax Deductions and Your Small Business
Time: 11:07:14 PM EST
Author: sloppyfrogg
Mood: Chillin'
Taxes are an inevitable — and painful — part of every business owner's life. But there are ways to reduce, if not eliminate, your company's tax burden if you know how to use business-expense tax deductions to your advantage.
Most business owners know they owe taxes only on their net business profit — that is, their total profits after they subtract their deductions. As a result, knowing how to take full advantage of your deductible business expenses can dramatically lower your taxable profits. It's even possible to combine business with pleasure and to enjoy certain tax-deductible lifestyle perks — such as a sports car you use for work or a business trip to the Bahamas.
You can legally deduct a number of expenses commonly associated with your trade or business. Allowable deductions include:
- Employee wages and most employee benefits
- Rent or lease payments
- Interest on business loans
- Real estate taxes on business property
- State, local and foreign income taxes assessed to your business
- Business insurance
- Advertising and promotion costs
- Employee education and training
- Education to maintain or improve your own required business skills
- Legal and professional fees
- Utilities
- Telephone costs
- Office repairs
Related Articles
If you have a home-based business or a home office, you can also deduct a percentage of your residential real estate taxes, utilities and telephone expenses. In addition, your auto, meal, travel and entertainment expenses may be deductible if they relate directly to your business.
Finally, here's a friendly reminder: Always maintain complete and accurate business records to document your deposits, income, expenses and deductions. If the Internal Revenue Service audits your business, it may require you to demonstrate that each entry on your tax return is correct.
Tax laws change annually, and they can be very complex. Always consult your accountant or tax attorney for assistance, strategies and recommendations for your individual situation.
In addition, make sure to read these articles:
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Saturday, January 28, 2006
Subject: Yahoo Group
Time: 7:07:30 PM EST
Author: sloppyfrogg
Mood: Happy
Click to join Forgey_Bookkeeping
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Subject: 2006 Tax Season
Time: 2:59:40 PM EST
Author: sloppyfrogg
2006 Tax Season :
IRS Increases Mileage Rate Until Dec. 31, 2005
IR-2005-99, Sept. 9, 2005
http://www.irs.gov/newsroom/article/0,,id=147423,00.html
WASHINGTON — The Internal Revenue Service and Treasury Department announced today an increase to the optional standard mileage rates for the final four months of 2005.
The rate will increase to 48.5 cents a mile for all business miles driven between Sept. 1 and Dec. 31, 2005. This is an increase of 8 cents from the 40.5 cent rate in effect for the first eight months of 2005, as set forth in Rev. Proc. 2004-64.
“This is about fairness for taxpayers,” said IRS Commissioner Mark W. Everson. “People are entitled to deduct the real cost of operating a vehicle. We’ve responded to the recent gas price increases by making this special adjustment so taxpayers get the tax benefit they deserve.”
In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2005. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.
“With many predicting a decline in gas prices over coming months, we will hold off on setting the 2006 rate until closer to January,” Everson said. Next year’s rate could be lower than 48.5 cents.
While gasoline is a major factor in the mileage figure, other items enter into the calculation of mileage rates, such as the price of new vehicles and insurance.
The optional business standard mileage rate is used to compute the deductible costs of operating an automobile for business use in lieu of the extra burden of tracking actual costs. This rate is also used as a benchmark by the federal government and many businesses to reimburse their employees for mileage.
The new four-month rate for computing deductible medical or moving expenses will be 22 cents a mile, up from 15 cents for the first eight months of 2005. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile.
The annual Revenue Procedure includes limitations on who is not eligible to use the standard mileage rate.
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Tuesday, January 24, 2006
Subject: 2006 Tax Season
Time: 10:01:13 PM EST
Author: sloppyfrogg
2006 Tax Season :
Year-End Tax Planning Steps
By Chris on Taxes
In the month of December what do you think about… family, food, shopping? At this important time of the year, many business owners don’t give their tax situation a second thought.
What can you do to maximize your tax savings before clock strikes midnight on December 31st?
Barbara Weltman of Inc.com offers these 10 steps:
Step 1: Add to your revenue.
Step 2: Pay off accounts receivable.
Step 3: Make capital investments.
Step 4: Stock up on supplies.
Step 5: Distribute profits.
Step 6: Save for retirement.
Step 7: Make charitable donations.
Step 8: Get slow movers off your books.
Step 9: Adjust your estimated taxes.
Step 10: Get ready for new 2006 tax laws.
Source: 10 Steps to Year-End Tax Planning
Recommended Reading:
MotleyFool - Year-End Tax Planning Tips, Part I
MotleyFool - Year-End Tax Planning Tips, Part II
Google.com Search - “Year End Tax Savings”
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Subject: 2006 Tax Season
Time: 9:45:10 PM EST
Author: sloppyfrogg
Income Tax
By Chris Brunner on Taxes
Income tax amounts to the other half of total taxes owed each year by small business owners. How much you owe is determined by how much you made after expenses and deductions.
This post will show you how to estimate your income taxed owed in equation form.
First, you should determine what tax bracket you will fall into. Your tax bracket is used to estimate the amount of additional tax you’ll pay if your income increases — or the amount you’ll save if you can claim a deduction.
View 2005 Income Tax Rate Schedules
View 2006 Income Tax Rate Schedules
So for instance, you are married filing jointly and your taxable net earnings is $55,000.00. You will be taxed at the 15% rate.
Don’t forget: The IRS allows you to deduct half of your estimated self employment tax away from your net earnings.
The equation for estimating your income tax looks like this:
(((Net Earnings - (SEtax / 2)) - Income Min. Limit) * Tax Rate) + Minimum Tax
So assuming your estimated net earnings is $55,000 @ 15% (before deducting SEtax) the equation would be figured as:
((($55,000.00 - ($7,771.25 / 2)) - $14,600.00) * .15) + $1,460.00
((($55,000.00 - $3,885.63) - $14,600.00) * .15) + $1,460.00
(($51,114.37 - $14,600.00) * .15) + $1,460.00
($36,514.37 * .15) + $1,460.00
$5,477.16 + $1,460.00
Income Tax = $6,937.16
With net earnings of $55,000, your estimated total tax owed (incl. self employment tax) would be:
Itax + SEtax = Total Estimated Tax Owed
$6,937.16 + $7,771.25 = $14,708.41
Disclaimer: Tax results submitted to the IRS should be figured by a qualified accounting professional.
Recommended Reading:
Your Tax Bracket
Your Income Tax Bracket
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Subject: Need a Bookkeeper???????????
Time: 9:39:18 PM EST
Author: sloppyfrogg
Need a Bookkeeper??????????? :
January Tax Obligations for Business Owners
January 31 is the deadline for businesses to send out 1099s and W-2s. In a nutshell, W-2s notify employees of how much federal and state...
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