Bookkeeping Options: In-House, Outsourced and Everything In Between

Accurate record keeping at the most basic level provides the financial foundation for running a thriving business. When your financials are not accurate, even the most successful companies become a house of cards built on a faulty premise. Often times, this is not intentional but a result of someone performing a function in which they have little or no expertise and training. There are various options for managing your bookkeeping, but only you can determine which model works best for your company's needs.

1. Manage Bookkeeping in House - This provides you with the most control over your bookkeeping functions, as they are performed by an employee of the company. This option works best for large companies when there is enough work to keep a full-time bookkeeper busy, 100% of the time.

2. Hire a "Freelance" Bookkeeper - This option involves a temporary bookkeeper visiting your company on a regular basis to perform bookkeeping functions. This is more appropriate for small to mid-sized companies that do not have enough work to fund this position full-time.

3. Outsource Accounting and Bookkeeping to Third Party - Under this model, a company relinquishes all accounting and bookkeeping functions to a third party to fully manage. This model works best for smaller companies that do not require a full-time employee but do require skills and expertise in this area. It is also appropriate for companies that need these skills but can't afford to hire a full-time employee.

4. Hybrid Model of Partnering with an Outsourced Bookkeeping Service Provider - This option is most appropriate for those companies that do not want to relinquish complete control over their books but want to outsource non-core tasks. They partner with a bookkeeping service provider and consider them a remote extension of their team.

We are currently offering a free analysis of your accounting system and other business processes. If you would like to learn more on how outsourcing your bookkeeping and accounting can improve your profitability, please call me directly at 781.503.9004 or email me at sales@aixsol.com.

Satish Patel, CPA
President, Analytix Solutions
Satish Patel, Founder-CEO of Analytix Solutions, has more than two decades of experience as a CPA. He has also advised small and mid-sized businesses on diverse matters such as valuation, accounting, and finance. His experience extends to raising capital and arranging for finance from angel investors.

Bottom Line Benefits to Automating Your Accounting System

Although not always the most exciting aspect of a business, a company's accounting system is its backbone. The accounting system is the engine that drives the machine, providing business owners with key indicators regarding their profitability and the overall state of their business. Companies that have a firm grasp of their financials are positioned to succeed in the market across industries. Essential to that success are timely and accurate accounting figures, as well as the confidence business owners can place in the accuracy of those figures.

More and more frequently, small to mid-sized businesses are recognizing the need to automate their accounting systems given the speed at which they often need to make financial decisions. Manual accounting tasks can be time consuming, mundane, or duplicative tasks, and they can be prone to human error. Fortunately, there are currently numerous dependable accounting programs on the market, such as QuickBooks and Great Plains. Additionally, with the advent of cloud computing, information such as current data and immediate access to financial reports is available online, anytime and anywhere. Business owners can access the data themselves when they need it, without having to work through another department. These programs can greatly assist small to mid-sized companies in automating their systems and tasks such as expense approval and time entry, which in turn increase their profitability.

Benefits to automating your company's accounting system include:

> Eliminating redundancies in manual data entry.
> Reducing risks of errors and duplicate entries.
> Ensuring data integrity through automation.
> Self-service, accessibility to timely financial reports.
> Up-to-date information via cloud computing technology, anytime, anywhere.
> Improved productivity.
> Motivating staff.

Analytix Solutions provides a team of accounting and technology experts with extensive experience in helping companies automate their accounting systems and integrate third party applications with various accounting systems. We can help you to run your business more efficiently by automating key processes and assisting you to select solutions which align with your unique business requirements.

We are currently offering a free analysis of your accounting system and other business processes. If you would like to learn more on how we can increase your bottom line by automating your accounting system or if you know a colleague that can benefit from our services, please call me directly at 781.503.9004 or email me at sales@aixsol.com.

Satish Patel, CPA
President, Analytix Solutions
Satish Patel, Founder-CEO of Analytix Solutions, has more than two decades of experience as a CPA. He has also advised small and mid-sized businesses on diverse matters such as valuation, accounting, and finance. His experience extends to raising capital and arranging for finance from angel investors.

Take the Temperature of your Company's Financial Health

In any business, a clear understanding of the company's actual financial performance is critical to success. Measurement strategies and tools should be implemented to track and interpret the numbers generated by a business. An effective accounting and financial management system can provide this type of information to business owners, and the system's data can be manipulated and analyzed to provide key insights into the financial health of your company. A versatile accounting and financial management system can also enable you to interpret the status of your business to third parties, like banks and the government. The other advantages that accounting and financial management systems offer include:

Avoiding Assumptions on Financial Health: By maintaining an accounting system, you can make informed decisions about your business. Although there are multiple factors to consider, financial health should be a critical element in your decision making process for moving your business forward. Detailed accounting records and a proper financial management system reflect where the business stands financially. You won't ever need to guess about the financial position of your business.

Accuracy and Consistency in Information: Accounting plays a crucial role by offering you a means of communicating the financial aspect of a business to others. The most important function of any accounting system is to retain and present data so that managers and owners can analyze the decisions they have made. Financial status helps immensely in making profitable decisions for any business.

Aid in Analyzing Business Deficiencies: Professional and quality accounting systems generate reports that will enable you to assess the profitability and performance of your business. Accounting and financial management systems will not only allow you to make decisions, but they can also help you identify areas of your business that require improvement. Once the troubled areas are identified, you can work on those business functions to improve them.

Maintain Comprehensive Audit Trail: If your business requires loans, the lending firm will likely ask for financial reports and other relevant data so that they are able to estimate the net income and actual worth of your business. They may also assess and evaluate your financial statements to monitor your potential repayment of the loan. Availability of such information is almost impossible without any accounting and financial system in place that can provide financial statements.

Well maintained accounting records indicate where your business stands financially. Implement and retain your accounting and financial management system, and your business will find its way to success!

If you would like to discuss how I can help you plan a strategy to keep your company's financial health in the positive, please call me at 781.503.9004 or email at sales@aixsol.com.

Satish Patel, CPA
President, Analytix Solutions
Satish Patel, Founder-CEO of Analytix Solutions, has more than two decades of experience as a CPA. He has also advised small and mid-sized businesses on diverse matters such as valuation, accounting, and finance. His experience extends to raising capital and arranging for finance from angel investors.

Accounting and Bookkeeping Services for the Small business

Accounting and bookkeeping services function as the backbone for every business. As a small business, it is very essential to ensure you maintain your company's records in a comprehensive manner. Good accounting and bookkeeping practices include thorough record-keeping and ensuring that every bit of expense and revenue is accounted for.

If you're a small business and you're feeling overwhelmed keeping a track of your financial matters, especially your accounting services, you're not alone. Many small businesses start out with small capital. However, it is important to keep track of how this limited pool of funds is used, especially in the period before the business starts to earn revenue for itself.

When do you need help

As accurate record-keeping is vital to accounting services, you must ensure that all transactions, regardless of their size, are noted. However, this can often become a neglected area in daily operations, particularly if the business functions as an enterprise and there is very less manpower resource to spare exclusively towards accounting and bookkeeping department. This also extends to shortage of infrastructure. Most widely available accounting softwares in the market turn out to be an expensive investment. Together with hiring trained manpower resource and maintaining software infrastructure, carrying out integration, and automating systems, the costs of setting up a dedicated accounting unit can be pretty high for the small business.

Determining when you need help can be a tricky aspect, especially when considering accounting services. Even if you started as a small business, once your business starts earning revenue and building a bigger list of clients, your list of accounts payable and receivables will also increase. You may need to consider hiring accountant bookkeeping and accounting service provider.

Outsourced and more reliable

Contrary to what many people may be worried about, outsourcing your work can be a blessing. Accounting and bookkeeping services are a specialized area. If you don't have professional expertise, it is better, and much more profitable to hand over the work to someone who does it dedicatedly. Let's look at a few reasons why outsourcing requirements related to accounting and bookkeeping is a good idea.

Professional expertise: Your accounting & bookkeeping work will be executed by professionals, instead of being hastily put together by yourself after a short online self-teaching session.

A professional will also help you determine what kind of accounting is suited to your business (cash vs. accrual)

Save on costs: It is likely you have a resource in your organization who understands a bit of accounting and bookkeeping. However, it isn't profitable if this resource has to put aside his or her routine work to attend to accounting and bookkeeping tasks.

Superior quality: Accounting and bookkeeping need detail and accuracy. When your accounting work is carried out by a professional, you get reports that are comprehensive and detailed. Superior quality accounting work also helps your tax preparation.

Satish Patel, CPA
President, Analytix Solutions
Satish Patel, Founder-CEO of Analytix Solutions, has more than two decades of experience as a CPA. He has also advised small and mid-sized businesses on diverse matters such as valuation, accounting, and finance. His experience extends to raising capital and arranging for finance from angel investors.

Efficient Record Keeping Strategies to Ensure Smooth Audits

Take any process. You will find that efficiency most often results from investments of time and organization. The same theory applies to accounting functions as well.

Audits are an accounting function where financial statements are examined to verify information. A financial audit determines whether the information contained within financial statements is reliable and accurate.

An audit is significant because it represents the basis of confidence invested in the company by its shareholders. A financial statement is often referenced to assess the 'health' of a company, and an audited statement can significantly enhance an organization's credibility.

How can you ensure greater accuracy in your audits? Below are some ways in which you can improve your record-keeping methods to ensure smoother audits:

Records needed

Maintaining effective records requires that you have a clear understanding of the kind of records you need to keep, and this is dependent upon the type of business that you operate. Some businesses must maintain property and real-estate related records while others must track purchases of other assets, such as machines or vehicles used for your business. In general, the kinds of records needed include:

Gross receipts for income received as a result of your business. Examples include receipt books, credit card slips, invoices, Form 1099-MISC, etc.

Documents supporting purchases you have made for your business, particularly if your business includes procuring or purchasing raw material and converting it into finished goods for your clients.

Records of employment are equally important. As employers, you may need to preserve employment records for four years, as part of good record-keeping practices.

Why keep records?

Records assist in:

Consistent business monitoring

Keep track of triggers that may impact the progress of your business. This can include documents which may indicate areas of potential sales growth.

Accurate financial reporting

The importance of this cannot be overestimated. Make certain to maintain error free income statements and accurate balance sheets. These represent the way in which you manage your business and relationships with your creditors or lending institutions, such as banks.

Maintaining receipts

Compile and organize your receipts carefully. Most businesses receive payments or income from multiple sources. It is critical that you track these sources and segregate your taxable and non-taxable income. Your bank statements should be reconciled regularly, while your investment records should be organized to reflect any taxable income.

Maintaining organized receipts assist in facilitating smooth audits, any they also help you accurately track of expenses and income.

Review reports periodically

Review your accounting and financial statements periodically to check for accuracy. Periodic reviews allow you to note mistakes in their initial stages and avoid having them snowball into larger issues.

Additionally, reviewing reports periodically ensures you are tracking expenses and costs. If at any stage you uncover an expense discrepancy, it can be addressed immediately. Discovering discrepancies which could have been easily resolved at the last minute only points towards poor report management and can create problems during an audit.

Consolidate reports and data

Most accounting data is voluminous and substantial. Instead of manually pouring over multiple, diverse entries and worksheets, which can result in unnoticed errors, consolidate related data in a single place.

A single source will also assist you in knowing exactly where to look for specific information.

Again, consolidation is easier when you review your records regularly. A small unit of data is easier to consolidate than larger chunks, which makes regular review and consolidation more meaningful. Invest in automation, if it helps your financial record-keeping. If executed by the right vendors, automating your accounting systems can help you reduce actual errors while allowing you to process more data in a shorter period of time.

Implementing the above record keeping strategies will help ensure that your business has a smooth audit.

Satish Patel, CPA
President, Analytix Solutions
Satish Patel, Founder-CEO of Analytix Solutions, has more than two decades of experience as a CPA. He has also advised small and mid-sized businesses on diverse matters such as valuation, accounting, and finance. His experience extends to raising capital and arranging for finance from angel investors.

Checklist for Meeting with Your CPA

Inevitably, it's that time of the year again when you need to prepare to meet with your CPA to discuss taxes. You need to take stock of your investments, any financial transactions undertaken, and, most importantly, the paperwork to support these.

Typically, the biggest challenge revolves around locating and compiling the relevant paperwork when it is needed. To make the most out of your meeting, it makes sense to locate these documents and papers before you head out to the CPA.

Following is a short list of some common documents you should have before rushing off to your CPA.

Income Records
-Invoices
-Bank Statements
-Brokerage Statements
-Investment Account Statements
-Schedule K-1

Invoices, Bank Statements and Investment Accounts
As a small business, you need to carefully track your receipts and invoices. Any record of income, such as bank statements and investments need to be provided. The form 1099-INT which reflects your savings and interest is also required by your CPA.

For this reason, it is important to perform timely reconciliations of your bank statements and to keep your income receipts, investment account documents, and brokerage account papers easily accessible.

Schedule K-1
If your business is classified as a partnership or corporation, you are also required to report any income or loss in the form of a Schedule K-1. This form carries details of individual shares of income within a partnership or corporation.

Expenses
Miscellaneous office related expenses
Mileage
Payroll documents
Mortgage interest statements
Rent
Interest expenses
Insurance

Office Expenses:
Your expenses could range from direct office expenses, such as supplies, to more significant expenses, such as travel.

Mileage Expense
If you use your car for business purposes, you can claim it as a deduction or at least miles driven for business purposes as a deduction. Make sure you also track receipts for any tolls incurred while driving for business purposes.

Payroll Expense:
If your company hires employees, then you need to provide documentation of their salary or wages. There is also the Form W-2, W-3, and other state payroll returns such as Form 940 that you will need to keep updated.

In fact, the Social Security website has the capability of online W-2s, where you can create and print up to 20 W-2 forms for your employees. Check this URL: http://www.ssa.gov/bso/bsowelcome.htm to access the service.

Do you have people assigned to specific tasks in your company or hired for a specific expertise or duration? If so, then you need to report their earnings from you via a separate form such as a 1099-MISC which contains details of payments made to agents contracted by you.

You can also claim tax deductions if you are providing retirement plans to your employees. Keep this documentation on hand.

Mortgage Interest:
Many small businesses or enterprises operate out of the owner’s home. If you are using your home for business purposes, you can include documents to support your mortgage interest, insurance, and other maintenance-related expense documents for the purpose of deductions.  If you are self-employed, you may need to use Form 8829 for claiming this deduction.

Office Rent:
If your office premises are rented, you could claim deductions on the rental taxes related to real estate and other utilities.

Interest Expense:
Some small business owners have taken loans for business activities. Any money borrowed for business purposes can be deductible, if you have valid documentation supporting its usage.

Insurance:
Insurance policies taken for the purpose of business coverage can be reported as a tax advantage, so be certain to keep track of these insurance papers.

Use this checklist to prepare for your next tax meeting with your CPA.

Satish Patel, CPA
President, Analytix Solutions
Satish Patel, Founder-CEO of Analytix Solutions, has more than two decades of experience as a CPA. He has also advised small and mid-sized businesses on diverse matters such as valuation, accounting, and finance. His experience extends to raising capital and arranging for finance from angel investors.