Launching a Successful Start-up

Why do some businesses fail while others take off almost right from the very beginning? Is it the services they provide or products they offer to their clients? Is it the way in which they conduct business or the competencies they possess that make or break a business?

Businesses could fail for a number of reasons, including:

• Inadequate budget
• Inadequate infrastructure (resulting from a tight budget)
• Lack of understanding about the market and customer needs
• Losing focus or purpose

The last item more often results from not outlining objectives clearly.

Establish Clear Business Goals

Establishing clear goals should be priority; most businesses fail because they lose focus and direction midway. Outlining and defining your goals gives you direction and allows you to progress systematically. It helps to define goals clearly. For small to mid-size businesses and enterprises, well-defined goals can help provide much-needed motivation as well.

Ideally, separate them into different sections like service goals, financial goals, and business development goals. Keep in mind that some goals will be dynamic, changing as the business gathers steam.

• Financial goals: If you think of profits first, you are not alone. But realistically, businesses need to break even before jumping to profitability. Your financial goals can include steps to first recover the funds you invested in starting the business. Cash flow management can help you in this process by allowing you to allocate specific sums for expenses.
• Business development: All businesses need to work at this constantly, if they have to grow. Whether it is tapping your customer base directly or including promotional marketing and advertising; outline your goals clearly.
• Service goals: This is also a good way to ensure consistency in your business, if you are more than a single founder or owner. Define and establish service goals, including delivery areas and limitations.

Understanding Core Competencies

When you first establish a service goal, you come closer to understanding your core competencies. Core competencies take into account ability together with the resources available to you. So, how do you identify and analyze your core competencies? To identify your core competencies, remember:

• Core competencies should be unique to your business; you should not have too many competitors offering it, otherwise it is not really your core competency.
• It should add value to your clients’ work or services or products.

To this end, your core competencies can be varied. They can be technical or related to a particular product. Your core competencies could lie in the way you deploy and manage a process such that your client can optimize their own resources and infrastructure best.

Identify areas lacking expertise

A start up may get crippled by lack of expertise in a specific area or industry. This can be reflected in terms of poor work quality, incorrect pricing strategies, or inaccurate delivery time.

Areas lacking in expertise can include a service, a process, or even something technical, such as a particular technology you may be unable to install.

For a small business, for example, utilizing technology can prove to be extremely advantageous. How often do you come across a website that seems promising, only to discover that the business backing it up cannot live up to its claims. Some businesses may not be able to afford current technology and expenses that come along with it. However, in current times, technology is woven across business functions and any incompetency could also surface in the administrative, operational or financial areas of a business which require their own expertise. Problems in any of these areas can impact startup operations, thus leading to failure.

Every business will face challenges at some point; success lies in resolving issues as best as you can.

If it is niche services like specific IT matters, accounting and financial matters, marketing services etc., you may be better served by outsourcing. Outsourcing can take care of your need for expertise, together with budget restraints.

Launching a successful start-up involves hard work, discipline and a certain amount of business “know how”. Analytix Solutions has a team of experts who work with start-ups to improve their business processes and help move their company forward. For a free analysis of your business processes and more information on how we can help your business succeed, please contact us at sales@aixsol.com

Analytix Solutions
The Company that CPAs Recommend
Analytix Solutions is a professional full-service business support solutions provider. The company offers comprehensive and scalable bookkeeping and accounting services while leveraging its expertise, experience, and state-of-the-art infrastructure. It offers multiple services in diverse packages for companies that are seeking a trustworthy and professional partner to give their business a head start.

Accounting Pitfalls to Avoid

Accuracy is critical in accounting. From basic bookkeeping to financial reporting, accurate and timely entries are essential practices for any business. Adherence to disciplined accounting practices enables businesses to accurately monitor the financial health of their company.

In addition to accounting accuracy, businesses also need to ensure that they have an understanding of key functions such as cash flow planning and management.

Following are some accounting pitfalls to avoid, particularly for small businesses, where resources and budgets are often rationed.

Missing entries and untracked expenses

It is easy to forget about recording an expense once the transaction is complete. Once an entry is missed, it may go unnoticed until tax time. Not only does this result in inaccurate accounting and finances, it can also erode profits, as expenses which are smaller than those stipulated by the IRS guidelines remain unrecorded by business owners. However, these small expenses accumulate and could be beneficial to track for tax purposes. Even small expenses can add up to help you qualify for effective tax deductions.

Mismanaging cash flow

Cash flow management helps you monitor income and expenses. Poor cash flow management can lead to the illusion that there is enough cash, whereas in reality, the income no longer matches the expense. You may feel that there is enough cash reserve, while in reality the expense has already exceeded income. This can happen with your petty cash reserves, as well as with the company's overall finances. With small cash reserves, this problem may be compounded, since it is easy to lose track of money withdrawn.

Not managing the cash flow can result in cash crunches when you least expect or need them, eating into investment opportunities or derailing plans for expansion which may need some initial expenses.

Delaying account reconciliation

Account reconciliation is a critical step in the bookkeeping process. For business owners performing this function themselves, it is often relegated as a task to complete later. However, this opens the door for small errors to snowball into larger accounting mistakes. Further, like poor cash flow management, this can also give you a false sense of liquidity.

Using manual accounting

Manual accounting is not a pitfall in itself, but it can lead significant errors, especially if your company is growing. Accounting software can assist in regulating your bookkeeping, ensuring more accurate books, and eventually, dependable financial reports. Using software to automate accounting can help your business in several ways:

• Automated systems track and update records of funds withdrawn; they also balance the remaining reserves, thus providing the correct measure of liquidity.
• Automation reduces dependency on human beings, therefore reducing opportunities for human error or fraud.
• Automation helps create updated reports and, more importantly, accounts that are tracked and contain recorded data. In contrast to manual bookkeeping, automation can generate reliable audit trails and ensure accurate financial data.

These are just some of the accounting pitfalls that companies should attempt to avoid in an effort to maintain accurate financial records.

Analytix Solutions
The Company that CPAs Recommend
Analytix Solutions is a professional full-service business support solutions provider. The company offers comprehensive and scalable bookkeeping and accounting services while leveraging its expertise, experience, and state-of-the-art infrastructure. It offers multiple services in diverse packages for companies that are seeking a trustworthy and professional partner to give their business a head start.

Transaction Compliance: The Key Factor for High Performing Accounting Processes

Transaction compliance is essential to controlling payment errors such as overpayment in procure-to-pay services. For many businesses, regardless of their industry, accurate, timely payouts can be a challenge- which impacts vendor relationships.

How is Transaction compliance central to high performance accounting?

Procure-to-pay processes are often filled with errors such as inconsistent payments, overpayments, or data and information errors. For businesses that regularly make vendor payments, these issues may get resolved with post-payment audits. However, for many small and mid-sized businesses, seemingly small errors can result in large financial losses.

Prevention is the best solution, and one way of managing this is implementation of a compliance tool.

The transaction compliance tool works towards controlling and preventing errors on the front end of financial transactions as opposed to correcting them once damage has been done. Transaction compliance can prevent overpayment errors before they occur.

Small businesses that operate under budget restriction can outsource transaction compliance, which does not need to be an in-house function. Many successful businesses outsource some of their services to reduce costs; but they also turn to outsourcing to optimize existing resources and to leverage professional expertise, making them more efficient.

How can transaction compliance tools help me?

Transaction compliance tools are designed to prevent you from making overpayments. This is accomplished through stringent monitoring of both purchase and payment transactions. Apart from simply monitoring transactions, the tool also provides data that offers useful pointers which outline deficiencies in the procure-to-pay process while also allowing you to identify possible improvements.

Apart from helping your company avoid payment-related errors, the tool also facilitates smoother cash flow and reduces post-audit costs. Furthermore, considering the role it plays in monitoring accounts payable, the tool reduces the potential of fraud and fees otherwise paid to third-parties. Integrating the tool in to your financial practices creates a pattern of reduced errors and timely payments – creating better collaboration with vendors and suppliers.

Towards high-performance accounting

When customized to the needs of your business, transaction compliance tool can boost your accounting capabilities and allow existing resources to perform better.

• Monitors accounts payable, thus helping to prevent overpayments.
• Thorough monitoring allows for review of large volumes of data, helping to identify any payment errors before they occur.
• Assists in reviewing and analyzing pricing.
• Fosters collaboration and trust with vendors and suppliers providing timely and accurate payment history.

To find out more information on how to integrate transactional compliance into your financial processes, call us today at 781-503-9004 or email us at sales@aixsol.com

Analytix Solutions
The Company that CPAs Recommend
Analytix Solutions is a professional full-service business support solutions provider. The company offers comprehensive and scalable bookkeeping and accounting services while leveraging its expertise, experience, and state-of-the-art infrastructure. It offers multiple services in diverse packages for companies that are seeking a trustworthy and professional partner to give their business a head start.

Impact of Cloud Based Systems on Business Valuations

Surprisingly, many small to mid-sized business owners, when prodded, have no basis or accepted methodology for valuing their business. Many of us "think" we know what our business is valued at, but it is often difficult to determine objectively what the business is worth, separating out the passion and "sweat equity" we pour into our companies. For many small to mid-sized business owners, the value of their company may be their own largest personal asset. For businesses that may not be completely privately owned, the value of the company still significantly impacts the partners' overall compensation.

Critical to valuing a business is having an understanding of the company's financial situation. Accurate business valuations require a certain level of financial expertise and analytical experience, and keeping this level of expertise on staff full time can often prove costly for small businesses. However, with the advent of cloud computing, the ability of business owners to accurately value their business has exponentially increased providing them with significant benefits.

1. Real time access to financials- For business owners who have invested in cloud computing services, the financial data they can access is no longer a monthly (or quarterly) static figure. The impact of sales and purchases immediately factors into projections, so that owners can confidently assess their financial situation and have a handle on the health of their business. If they require outside assistance to analyze the figures, providing organized, real time data to the experts assisting with the business valuation is more efficient and therefore more cost effective.

2. Reporting and financial modeling- Many cloud computing programs and system providers offer the option of reporting various performance metrics, indicators that the business owners otherwise may not be able to access. Some providers include standard reports that track financial progress and allow for users to run various scenarios on income projections, evaluating how that then impacts the value of the company. Larger corporations historically have had the means to invest in heavy IT infrastructure and expertise to produce this type of reporting. However, cloud based systems that do not require heavily investing in IT architecture, infrastructure, and support have changed the way small to mid-sized companies do business in that they, too, now have access to this type of financial reporting. Smaller companies now can make decisions based on the same type of financial intelligence previously reserved for larger, more lucrative companies.

3. Transparency of shared data- For businesses prepping for potential sale, investment, or securing loans, cloud based systems allow business owners to share real time information with buyers, investors and lenders, adding credibility to financial data. Investors and lenders can be granted access to financials that provide direct insight into the health of a business, reducing concerns that the data provided to them is not "clean" data.

Although many factors impact the value of a business, such as strength of management team, the most critical factor is a company's financials. Maintaining updated, accurate financial records and having "real time" access to those figures helps business owners assess the true value of their company. We are currently offering a free analysis of your accounting business processes and accounting system. If you would like to learn more on cloud based systems can improve your bottom line and impact the value of your business, 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.

Four Tips for Effective Succession Planning

Succession planning is especially essential for owners of small privately owned or family owned businesses. The aim of the succession plan is to ensure that the values and vision held by the business continue. To ensure the business legacy carries on, careful consideration must be given to the succession process. However, owners or partners often neglect to give this process the serious attention it deserves.

This happens for several reasons, including owners finding it difficult to relinquish control of a successful business that was built through passion, dedication, and hard work. Other reasons can include family dynamics that may be fraught with tension, when otherwise invisible surface at times of succession discussions. Even if family relationships are amicable or the question is not applicable to business operations, succession decisions can impact key people within the business itself that can make the entire process cumbersome. This may include tenured or key employees feeling either entitled or neglected in the decisions.

Below are four tips to help ensure development of a successful succession plan.

Plan well in advance; involve professional help if necessary
One of the most common visions for succession is that of a founding member of the business growing old and transferring leadership to an identified, younger employee or family member. Unforeseen developments such as accidents or deaths can easily disrupt such plans, as can situations such as founding members receiving compelling employment offers. Succession planning in such cases becomes reactive, hasty and ill-planned and could erode the company's revenue stream, including customers and market share.

Instead, businesses could benefit immensely from identifying and securing professional assistance. Succession planning can then be conducted in a thorough manner, without disrupting the future of the business or its legacy.

Determine the qualities of the successor; address ownership
Succession planning should also include business ownership in its domain. This translates to identifying issues that surpass just business management concerns. For this reason, determining a successor becomes a key factor in the plan. Founding members may look for someone most similar to themselves; but this need not always ensure a successful succession plan. Instead, owners should look at the contemporary business environment and look for qualities in the successor that will carry the business forward in current times.

Design a selection plan/process
Unless the business is passed from family generation to generation, a rigorous selection process is required to ensure selection of the right candidate for the position. Consider designing a test that can assess strengths and weaknesses of the potential leader, and administer it to key employees of the business. The exam should not test just leadership qualities; it must also capably assess the candidates' adaptability and creativity and whether they can maintain and develop the legacy of the accompanying business.

Also, succession plans do not require in-house successors. If needed, keep your selection circle open. Hire professionals who can assist in identifying and hiring the right candidate from outside the business.

Make a decision and inform employees about it
Succession planning may begin with much enthusiasm but may lose momentum if the business owner chooses to defer completing it until a later time. If needed, revise and review selection criteria as well as the final decision; however, establish a realistic selection date, as well. After conducting the search, commit to making a decision to avoid negatively impacting morale across the business. Without the perceived consistency of a leader, employees may feel rudderless, impacting overall productivity and the company's bottom line.

By considering the above tips, you have taken the first steps in creating a successful succession plan.

Analytix Solutions
The Company that CPAs Recommend
Analytix Solutions is a professional full-service business support solutions provider. The company offers comprehensive and scalable bookkeeping and accounting services while leveraging its expertise, experience, and state-of-the-art infrastructure. It offers multiple services in diverse packages for companies that are seeking a trustworthy and professional partner to give their business a head start.

Increase Efficiency with Contract Management Systems

As part of our commitment to provide complimentary services which assist our clients in improving efficiency, Analytix Solutions recently developed and launched our new Contract Management System. Contract management systems can be an invaluable addition to any business. This is particularly true for businesses that lack dedicated resources and manpower for management of contracts, such as small and mid-size businesses and enterprises.

Contract management often involves understanding the terms and conditions of various contracts, undertaking negotiations, documenting the process, and tracking amendments and changes.

Contract management requires tracking correspondence such as purchase orders or sale invoices. Depending on the type of the contract, it may also include documentation of details such as technical instructions, legal specifics, and other miscellaneous terms and conditions. Implementing accurate contract management processes reduces the risk of errors caused by misunderstandings of the technical, legal, financial, and other similar details associated with the parties involved.

Proper contract management entails tracking vast amounts of data and details, resulting in an intensive and time-consuming process. By contrast, a contract management system facilitates organization of these details which is immensely beneficial for businesses where manpower resources, budgets and infrastructure are constrained. Implementation of a contract management system ensures accurate information is recorded for key contract elements such as the unique contract ID, the entity entering into the contract, type of contract, etc. Elements including date of the contract, renewal date, and even date of price increase, if applicable, may be included in a comprehensive system, thus helping businesses maintain an accurate report for each contract.

Benefits of Analytix's new Contract Management System include:

• Automatic reminders- Our new system emails reminders and alerts to multiple parties involved in the contract execution. The system also offers easy-to-navigate dashboard, making critical information more readily accessible.
• Detailed tracking- To facilitate managing multiple contracts, our system collects detailed information on each contract, such as the type of company or entity involved. Furthermore, the contracts can be tracked by various categories such as company location, department responsible for contract, etc.
• Central depository for all contracts- Storing contracts in a centralized location makes them easier to access. Moreover, our system offers significant storage space so that clients can store an unlimited number of contracts, while simultaneously being able to easily search them for key data.

For more information on our new Contract Management System, please email us at sales@aixsol.com.

Analytix Solutions
The Company that CPAs Recommend
Analytix Solutions is a professional full-service business support solutions provider. The company offers comprehensive and scalable bookkeeping and accounting services while leveraging its expertise, experience, and state-of-the-art infrastructure. It offers multiple services in diverse packages for companies that are seeking a trustworthy and professional partner to give their business a head start.

Leverage Depreciation Methods to Gain the Most Benefits in 2013

What is Depreciation?

Depreciation is the term used to describe reduction in asset value or assigning asset expenses to time periods of their usage.

When an asset's value decreases, it is termed as fair value depreciation, while assigning costs to the period of use of an asset is termed as depreciation with matching principle. Fair value depreciation influences a balance sheet, whereas depreciation with matching principle can affect the net income that is reported by the business.

For small businesses that operate on fixed budgets, leveraging the advantages of depreciation can be extremely beneficial. A business can assign expenses to assets, and if an asset is expected to prove useful in the future these expenses may be deferred. The depreciation is then noted in current period cost allocation, based upon the asset cost, its expected value, and its shelf-life.

Managing depreciation

Depreciation of capital assets needs to be accurate, like any other accounting function in an organization. One of the ways in which depreciation could be streamlined is to manage each asset separately or individually in a fixed asset management system.

How do you determine the amount to be depreciated? The difference between the cost of a fixed asset and its residual value is the total amount that needs to be depreciated over the life span of the asset. The time period across which the fixed asset is to be depreciated is termed as the 'useful economic life' of the asset.

Accurate depreciation matters because it is applied against the total profits earned by the organization in a single accounting period. There are several methods by which to arrive at this.

Straight line depreciation method

This depreciation method operates on the principle that every accounting period in the life of the asset should reflect equal depreciation. The formula for this is as follows:

Cost of Asset – Residual Value of Asset/ Number of years of Useful Economic Life of the Asset

Points to remember in this method

> This method is effective if the benefits received from a fixed asset are expected to remain unchanging for the most part, over its useful economic life.

> This is a popular method, and one widely adopted by many companies in calculating depreciation.

Reducing balance method

This method allocates a high depreciation charge in the initial years of the asset life, but it lessens the charges as asset age increases. The formula for this method is as follows:

Depreciation = Percentage of the reducing balance

Points to remember in this method

> The depreciation percentage is applied to the written-down value of the fixed asset.

> In some fixed assets, the benefits do decline over its period of useful life. Thus, this method is beneficial where the allocation of expenses matches with the pattern of benefits derived from the asset.

Financial and Accounting benefit

> Regardless of the method chosen, the total depreciation charged will remain the same because depreciation is not a method of valuation; instead, it allocates expenses.

> One of the two methods should be adopted and retained to gain the maximum benefit from depreciation over the asset's lifetime.

> Methods may be changed if the new one displays a clear advantage in financial position.

Depreciation of Capital Assets

Some organizations may not calculate depreciation using fixed asset systems. For these organizations, generating depreciation expenses every month could probably help maintain the pattern and also help in streamlining the process, resulting in higher accuracy.

Automated accounting solutions that can better define and improve the scope of the overall method used for depreciation, and they can also help in cases where fixed asset system is not used.

Any automated system needs to be customized to the specific needs of the organization. However, most of them would:

> Identify the capital assets involved

> Calculate and generated depreciation expense per capital asset on a monthly basis

> Provide a report on the depreciation of capital assets.

Whichever method you select, make sure that depreciation practices are fully leveraged to help you improve the profitability of your business.

Analytix Solutions
The Company that CPAs Recommend
Analytix Solutions is a professional full-service business support solutions provider. The company offers comprehensive and scalable bookkeeping and accounting services while leveraging its expertise, experience, and state-of-the-art infrastructure. It offers multiple services in diverse packages for companies that are seeking a trustworthy and professional partner to give their business a head start.

New Year Financial Resolutions for Small Businesses to Increase Profitability

New Year resolutions can fall by the wayside soon after they are made. However, those which involve adhering to financial best practices during the subsequent year should be followed with sincerity. For small businesses that often face inflexible budgets and the prospects of further cuts, this is even more important.

One trick to keeping your resolutions on target is to tackle them one step at a time. This rings true for maintaining financial resolutions, as well.

Resolve to abide by the books

In other words, maintain accurate books. Keep all expenses recorded and updated.

Resolve to record every transaction as it occurs or immediately afterwards. Write it on a piece of paper if required and then transcribe to your expense log. As a business owner, you need to ensure that all financial transactions are not verbal but are supported by written documentation.

One practical solution for ensuring diligent record-keeping for most small companies could be automation or turning to professional bookkeeping.

Improve financial reporting

Resolve for better and if possible, more detailed financial reporting. There are several software options available today that not just carry out detailed bookkeeping and data management, but also present users with accounting analysis and comparisons of other industry players by means of mathematical ratios. Tailoring the information you receive from your financial reports can be accomplished by customizing the setting parameters which you'd like compared and analyzed.

Keep an eye on short-term financial issues

Levers that impact business profitability can be short-term financial functions, not just long term improvements. Current and short-term goals such as close monitoring of cash flow, revenue and expenses, combined with meeting or surpassing customer expectations from your services/products/deliverables can help you increase profitability.

You can also implement accounting methods such as cost-volume-profit analysis and other cost calculations that will help you evaluate various parameters such as sales on costs, profits, etc.

Getting a clear handle on these factors will provide you with insight into helping you decide where your efforts are best leveraged and whether you should consider outsourcing certain functions to free up key resources for other profit-making efforts.

Continuously improve existing financial information systems

Look for information systems that help to standardize information and disseminate it in a timely and easy-to-use manner. Your financial applications should be easy to understand and use. Information systems should also be customized to provide the right kind of information that is detailed and aligned with your company's objectives.

Ensuring that information is updated assists decision makers to focus on areas of profitability, as they can confidently make financial adjustments knowing that the data is reliable. Proper categorizing and reporting of financial information empowers the entire decision-making process by providing a clear snapshot of the company’s health.

Make it a goal for your company this year to establish some financial New Year's resolutions…..and stick to them.

Analytix Solutions
The Company that CPAs Recommend
Analytix Solutions is a professional full-service business support solutions provider. The company offers comprehensive and scalable bookkeeping and accounting services while leveraging its expertise, experience, and state-of-the-art infrastructure. It offers multiple services in diverse packages for companies that are seeking a trustworthy and professional partner to give their business a head start.

Fiscal Cliff Implications on Small-Mid Sized Businesses

By now, most of us are well aware of the 2012, eleventh-hour, year-end deal and decisions enacted by Congress to avert the Fiscal Cliff crisis. Whether or not those decisions successfully will accomplish that objective remain unknown. The legislation minimizes tax increases for the individual taxpayer, but it is still unknown what consequences those changes will have on long term economic development. However, one thing which is certain is that several of those measures have a direct impact on small to mid-sized businesses, resulting in both positive and negative implications. Several of what could be the most impactful measures on small to mid-sized companies are summarized below.

Permanent Tax Rate on Salary- The tax rate for single income earners with taxable income over $400K or married earners with taxable income over $450K will be capped at 39.6%. Households with income lower than that will remain at the lower tax rate. The majority of small business owners have taxable income that falls under the $400K/$450K threshold, so permanent continuance of that lower tax rate is good news. For business owners with taxable income above the $400K/$450K threshold, the increased tax rate of 36% to 39.6% is not good news; however, it does allow for better tax planning, eliminating uncertainty about the rate.

Section 179 Depreciation Bonus- This incentive has been extended through 2013 providing a 50% tax credit to companies to purchase or lease new equipment. This measure promotes reinvestment in business and is beneficial to small to mid-sized companies, as long as they are willing to buy and in a financial position to make these purchases.

R&D Tax Credit- Like the depreciation bonus, this tax credit has also been extended and was made retroactive to 2011. This provides a 6% - 14% tax break for R&D expenses. Although this is a substantial credit and encourages investment in business growth, it applies only to small to mid-sized businesses that invest in research and development.

Payroll Tax Increase- The Payroll Tax Holiday was not extended as part of the Fiscal Cliff deal. As a result, employers' share of the Social Security tax rate will revert back to 6.2% from the 4.2% rate that has been effective for the past few years. Although a seemingly small percentage, this increase could have a substantial ramifications on payroll budget for small to mid-sized companies and discourage hiring. The small to mid-sized business sector accounts for a large percentage of job creation, so this may have a negative impact overall on economic expansion.

Work Opportunity Tax Credit (WOTC)- This measure has been extended through 2013, and encourages small businesses to hire underemployed and unemployed groups such as veterans and young people. This should assist in offsetting the payroll tax increase and incent small to mid-sized businesses to continue hiring, thereby promoting business growth.

Estate Planning Exemption Level- One of the most prevalent concerns among small business owners was the estate tax exemption threshold level. The new legislation has that level remaining fixed at $5.12 million, which is great news for small business owners. It was predicted to drop to just over $1 million. This would have been detrimental to many small, family owned businesses that have been family run for generations. In the event of an untimely death, many may have been forced to sell off part of the business or critical assets (such as machinery) to fund estate taxes, especially those companies which were heavily invested in assets but had low liquidity.

Assessing the true impact of these changes will take some time. Hopefully, the pros outweigh the cons for small to mid-sized businesses, and these measures will, in fact, stimulate growth. In the interim, it is more important than ever to have a clear understanding of your company's financials so that you are informed on which measures you can readily leverage to your company's advantage. We are currently offering a free 1 hour analysis of your business processes, including budgeting. If you would like to learn more on how Analytix Solutions can help move your business forward, 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.

Helpful Budgeting Tools For The Small Business

There are several factors in a business that can help you create realistic, and therefore more effective, budgets. There are also online services that can assist in tracking finances, thereby ensuring against financial loss due to poor planning. Sites such as QuickBooks, Intuit, and Peachtree (now Sage 50) provide user-friendly and helpful features, including invoicing and check writing assistance, financial reporting, and reliable integration for accounting functions such that no expense stays hidden or overlooked.

In addition, there are also spreadsheet-based tools that provide you with comprehensive business budgeting help.

Following are five tools that should be included in the budgeting process.

1. Sales forecasts and revenue projections

Sales forecasts are an essential tool for budgeting. You can create forecasts by accessing historical data and evaluating past sales figures and expenses. Most businesses have multiple revenue channels. Ideally, you can begin with a Revenue Projection Model to help analyze prices and also assess the outcome with various figures and percentages.

2. Utilizing capital budgeting analysis

If you're considering investing in infrastructure, such as equipment, begin with estimating capital purchases. Your capital budget can also include estimates for service or service processes and procedures. With the help of a Capital Budgeting Analysis tool, you can estimate project costs, while also calculating contributions to the firm's value. The Capital Budgeting Analysis tool functions in an Excel spreadsheet format, while evaluating different project metrics, including profitability index, internal rate of return, and net present value.

3. Tracking expenses with the Expense Budget spreadsheet

Using the Expense Budget spreadsheet, you can determine annual expenses or a budget for annual expenses. Depending on the type of business you operate and the monthly expenses incurred, you can calculate average expenses on a monthly and annual basis.

4. The Cash Flow spreadsheet

The twelve month Cash Flow spreadsheet allows businesses to maintain a cash flow budget to track the amount of cash collected and paid out. This tool compares figures contained in records of income from multiple revenue sources, including sales vs. expenses for business operations. This tool tracks expenses and income, and it presents them in an easy to use format for determining cash flow.

5. The Cash Flow forecast tool

This is a helpful tool for understanding annual profits vs. end-of-year debt figures. The tool can assist in determining which parts of the business are generating more revenue and which parts carry liabilities. Figures provided by the Cash Flow Forecast tool provide insights you can apply in allotting part of future revenue toward settlement of debts. For this reason, this tool also helps businesses create realistic budgets.

Incorporating the above mentioned tools into the budget planning process should allow the process to run smoothly.

Analytix Solutions
The Company that CPAs Recommend
Analytix Solutions is a professional full-service business support solutions provider. The company offers comprehensive and scalable bookkeeping and accounting services while leveraging its expertise, experience, and state-of-the-art infrastructure. It offers multiple services in diverse packages for companies that are seeking a trustworthy and professional partner to give their business a head start.

Collecting Business Knowledge: The Role of E-Document Management

Knowledge collection and management is a significant part of maintaining business continuity.

Regardless of the size of the business, collection, organization and dissemination of accumulated knowledge and information are critical to both the operational aspects of a company as well as to customer retention efforts.

Without documented processes or a centralized repository for information, knowledge of internal procedures and circumstances, as well as client history, often hinges upon a single employee. If that employee leaves the business, vast amounts of knowledge leave with him or her. Although this can be an issue for large companies, it can be an even greater issue for small to mid-sized companies in which one employee may be responsible for several different functions.

E-document management systems can help address this problem, as they exist as an electronic file cabinet of historical data that can be accessed instantaneously, and often remotely, 24/7.

Additional benefits of collecting and organizing knowledge via an electronic document management system also include:

• Searchable data via text within the documents
• Easy retrieval of electronic files, as opposed to manually having to search and retrieve paper files
• Cost savings due to reduction in paper, file cabinets, and archive locations
• Security on files via password protection or encryption
• Facilitates distribution of documents that outline processes as they can be easily disseminated via email or file sharing servers
• Business contingency planning, as files are electronically backed-up and often offsite via cloud technology

If you are a small to mid-sized company, assess if an e-document management system is right for you in assisting with your business continuity plans.

Analytix Solutions
The Company that CPAs Recommend
Analytix Solutions is a professional full-service business support solutions provider. The company offers comprehensive and scalable accounting and bookkeeping services while leveraging its expertise, experience, and state-of-the-art infrastructure. It offers multiple services in diverse packages for companies that are seeking a trustworthy and professional partner to give their business a head start.

Managing Passwords

As workspaces steadily move into virtual space, and cloud computing becomes a standard practice, passwords become a necessity. With data and information stored in virtual space, access is regulated with the assistance of passwords.

Why passwords?

Passwords are a necessary component for ensuring security for your data and online information. Regardless of work environment, whether employees work remotely or onsite at a corporate office, passwords assist with data protection.

Passwords are a first defense against unauthorized access of data. For this reason, passwords must be strong enough to guard against online hackers, as well. Because volumes of information are now stored online, you need multiple passwords to safeguard different bundles of information. Thus, a different set of passwords may exist for your bank accounts, your system logins and other administrative processes.

Following are some tips for creating passwords:

• Maintain a single password for every application

The sheer number of passwords you need to utilize can make it tricky to remember them all. This may tempt you to maintain a single password for all your needs, which ultimately defeats the purpose of a password. If hackers manage to crack the code, then all of your information is at their fingertips.

• Change your passwords frequently

Some websites, such as banking sites, will force you to change your password periodically. In general, it is a good idea to keep changing them even when you are not prompted to do so. To minimize confusion, some websites and applications also allow a single character change to qualify as a changed password. You can also incorporate changes such as capital letters to make the password stronger.

Here are some tips for managing multiple passwords:

• Choose relatively anonymous passwords

Do not choose names of family members, pets, street, locality, city, etc. Similarly, numbers representing birthdays, anniversaries of family members, the day a pet came home, apartment number or phone number, etc. are all very easy to access and should never be used as passwords.

Instead, choose a combination of this data. The sheer number of combinations should help maintain password security. Hacking is a systematic process. Hackers now have access to specialized software, which when coupled with information can provide strong clues to your passwords. But a judicious mix of numbers and alphabets, mixed in with special characters if allowed, can help your password remain strong. Additionally, most websites that require a password will help you in selecting a strong password.

• Take time to choose or make a password

Do not rush into creating a password. You will simply forget it later and risk getting locked out of vital accounts. If you record your passwords, make certain that it is not apparent to someone glancing at whatever you have written.

• Prepare a backup file for passwords

This can be tricky. If you have too many passwords, it makes sense to record them with the name of the applications to which they provide access. Save this information in a secure place. If the record is made on a computer system make sure it is not created on a shared system.

One suggestion is to record all your passwords on a document and then password-protect it. This way, you only have to remember a single password – the one providing access to that document. However, remember to never leave that document open to view on an unattended computer system.

Assess the strength of your passwords against these suggestions, and revisit making periodic changes to them to ensure security of your personal information.

Analytix Solutions
The Company that CPAs Recommend
Analytix Solutions is a professional full-service business support solutions provider. The company offers comprehensive and scalable bookkeeping and accounting services while leveraging its expertise, experience, and state-of-the-art infrastructure. It offers multiple services in diverse packages for companies that are seeking a trustworthy and professional partner to give their business a head start.

Five Tips For Creating A Successful Business Budget

Sound financial management starts with a strong budget. For a small business, a budget is the single largest influencing factors for a number of decisions, including business operations and expansion. There are a number of reasons you need a business budget in place:

> To know at a glance, how much money you have for business and operations-related expenses, including business expansion

> To prove credit-worthiness to investors or lenders

Tip #1. Understanding the business objectives

What industry do you belong to and what is the nature of your business? Your budget depends on the goals you establish for your business. If you own a small business, you need to consider several factors:

> Infrastructure requirements, including office space, computer systems, manpower resources, and other expenses such as potential hiring costs

> Expenses for business development activities, including marketing and promotional efforts

> Time and cost expenses for research and planning, including attending events

> For production industries, a calculation of costs associated with procuring raw materials may also be necessary

Tip #2. Review your existing financial status

Check your existing balance sheet and income statements. Take into account your income tax returns and cash flow statements. If you have already incurred expenses towards the business, such as earmarking office premises or purchasing equipment, costs towards these can serve as useful benchmarks for initiating the budget development process.

Furthermore, investigate the tax liabilities for your business. Begin with the IRS website – a useful starting point for understanding tax allocation. Accordingly, budget for setting aside some amount of money, based on average estimates.

Tip #3. Outline the expected costs

Look for historical data on work or services performed by businesses with similar goals and objectives. This can include cost estimates. On your spreadsheet, carefully note approximate costs for each of your objectives and business goals. If you have reliable past data, use it as a starting point for extrapolating and creating estimates that are affected by inflation or appreciation. Ideally, create annual estimates that can be broken into monthly estimates, if needed. Remember, if you are taking into consideration long-term investment expenses, then an annual estimate proves better.

Tip #4. Define the budget for costs

Now that you have estimated costs, establish an upper limit for the same expenses. Ideally, put your data on two or three different Excel sheets so that you can access it easily. If you spot patterns, such as an increase or decrease in annual costs, note this and use it as the basis for your budget allocation to account for appreciation or depreciation. To start, your figures can closely match those of the historical data you possess. Specific changes can be made as you progress.

Tip #5. Review your budget

At the beginning, your budget ideally should be reviewed on a daily or weekly basis, depending on the type of business you operate. As a clearer trend emerges, you can further define costs, instead of working around estimates. A working budget maintains enough flexibility to accommodate for new entries on a daily basis, if required. For example, if your business involves daily sales, you will benefit from reviewing them on a daily or at least weekly basis. This will assist in developing more realistic estimates and allocations for specific functions.

Analytix Solutions
The Company that CPAs Recommend
Analytix Solutions is a professional full-service business support solutions provider. The company offers comprehensive and scalable bookkeeping and accounting services while leveraging its expertise, experience, and state-of-the-art infrastructure. It offers multiple services in diverse packages for companies that are seeking a trustworthy and professional partner to give their business a head start.

Budgeting vs. Forecasting for Small Businesses

For many small to mid-sized businesses, the pending close to the calendar year parallels the close of the fiscal year. Businesses begin budgeting and forecasting for the subsequent annual period. "Budgets" and "forecasts" become forefront in everyone's minds. The terms often are applied interchangeably, yet both serve very distinct but essential functions. Budgets and forecasts work best when applied in conjunction with each other.

Budgets- A budget is a defined set of financial objectives that designate where a business needs to be. It guides a business in its financial decision making by acting as a control measure in maintaining financial solvency, as well as establishing growth objectives. Typically, a budget is created prior to the beginning of a company's fiscal year and is a static document.

The budget preparation process can be lengthy and complicated, as it must represent the overall financial objectives of the company, incorporate upper management's input, and include realistic, attainable, cross-departmental goals. It assists in holding departments and managers accountable by establishing clear corporate objectives.

Forecasts- A forecast is an ongoing assessment of "actuals" so that a business can evaluate where they stand based on their established budget. It allows companies to plan and account for fluctuations in their operations due to changing market conditions or unforeseen circumstances. A budget represents where a business needs to be, whereas a forecast represents where the business actually is.

Forecasts are performed frequently (often monthly) and should incorporate scenario planning to predict best case scenario, worst case scenario, and most likely scenario. Forecasting helps businesses make adjustments in their operations so that they are not caught off guard by a cash flow deficit, which could have huge, negative implications for a small business.

Both budgeting and forecasting are essential practices for any business. However, they are critical to small to mid-sized companies which can be impacted more dramatically than larger companies by seemingly minor fluctuations in expected revenue or expenses. Whereas a large corporation may be able to absorb some variance, small to mid-sized business are more sensitive to these fluctuations which could have a greater impact.

We are currently offering a free analysis of your business processes, including the budgeting and forecasting process. If you would like to learn more on how Analytix Solutions can help move your business forward, 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.

Avoid These 10 Bookkeeping Mistakes By Automating

Poor financial health is often a major contributor to the failure of many small businesses. Financial health is directly linked to efficient and accurate accounting. Particularly for small businesses, where resources and budgets are tightly rationed, automation often proves to be the best way to ensure efficient accounting and subsequently timely, updated financial reports.

Why automate?
Automation reduces dependency on trained and skilled manpower. Therefore, over time, automation can also impact a company’s bottom line. Following are 10 mistakes that can be avoided with the judicious use of automation.

1. Not tracking expenses diligently
It is easy to forget about recording an expense once a transaction is complete. Automation can help resolve this by ensuring all expenses are tracked. This strategy also applies to reimbursements, especially when small business owners may be covering expenses from their own funds without applying for reimbursements from the company.

2. Doing it all yourself
Most small businesses do not hire a trained bookkeeper for fear of incurring higher costs. Automation solutions can assist in effectively ensuring expenses are tracked and books updated.

3. Delaying account reconciliation
Account reconciliation is a critical step in the bookkeeping process. For business owners performing this function themselves, it is often relegated as a task to complete later. However, this opens the door for small errors to snowball into larger accounting mistakes. Automation can reconcile business books with bank and card accounts on a regular basis, thus highlighting discrepancies that may arise.

4. Tracking small 'incidental' purchases
Oftentimes, expenses which are smaller than those stipulated by the IRS guidelines remain unrecorded by business owners. However, these small expenses accumulate and could be beneficial to track for tax purposes. Even small expenses add up to help you qualify for effective tax deductions.

5. Reduced human interaction translates to reduced chance of fraud
Bookkeepers have the opportunity to commit fraud, especially embezzlement. For a small business, such losses can have huge impacts on profitability, as well as morale. Apart from implementing failsafe controls, automation also reduces dependency on human beings, therefore reducing opportunities for fraud.

6. Ensuring back up
Automation helps create updated reports and more importantly, accounts that are tracked and contain recorded data. As opposed to manual bookkeeping, automation can generate reliable trails and ensure accurate financial data.

7. Misclassification of employees
Once configured, the chances of misclassification of an employee are greatly reduced in automated systems. A small business could have a number of different resources, including part time employees or those working remotely. The IRS has various rule classifications for each employee category when it comes to calculating tax. An automated system leads to reduced errors and more accurate tax filings, regardless of the number of employees in the business.

8. Not making the appropriate deductions
Only a trained accounting professional knows for certain which tax deductions to take. Forgetting to deduct sales tax from a sale is a common error. For business taxation purposes, this error can prove costly because it displays a higher amount of sales.

9. Creating wrong categories
Bookkeeping is all about creating categories and ensuring the right figures are assigned to the right categories. Automated solutions can help by creating the correct categories and ensuring these are updated accurately. Updating the wrong category can result in larger issues at fiscal year-end.

10. Stronger management of petty cash
Most businesses maintain a petty cash reserve for minor expenses. However, it is easy to lose track of the money withdrawn from this reserve. With automated bookkeeping, expense tracking can ensure updated records of withdrawn funds and balance the remaining reserves.

Consider automation for your business to help ensure the integrity of your accounting.

Analytix Solutions
The Company that CPAs Recommend
Analytix Solutions is a professional full-service business support solutions provider. The company offers comprehensive and scalable accounting and bookkeeping services while leveraging its expertise, experience, and state-of-the-art infrastructure. It offers multiple services in diverse packages for companies that are seeking a trustworthy and professional partner to give their business a head start.

Developing a Strategic Plan for your Business

A strategic business plan helps to guide your business in a systematic manner. It can also ensure that you remain focused on your goals and business objectives when obstacles arise which could derail them. Following are five suggestions to follow for putting a plan in place.

Write it all down
What is your vision for your business? Put it in writing, as that one step solidifies that commitment. This statement should include goals for your business, including values which guide it. Begin with a couple of sentences that define your vision, and refine the message until you create a single, succinct statement that encompasses it.

Clarify business the goals
Identify the core areas of your business, in addition to the products and services offered. Include details of how you plan to meet your client needs, including timely delivery and level of customer service.

Plan components
Your strategic plan should cover elements that are critical to business success in the industry selected. These components can include sections such as marketing plan and revenue generation projections. As your business develops, you can add sections that cover policies and procedures to help your business manage growth.

Bringing it all together
As your company grows, you will need to consider critical junctures in the business plan that help the company move to the next level. You will need to develop marketing strategies that account for advertising or human resource plans to support a greater number of employees. As a business grows, the need for IT infrastructure and professional support in that area will, as well.

Establish realistic timelines
Your business plan should ideally include a deadline or implementation date. Ideally, schedule a date for all tasks. For example, if you are developing a marketing plan or launching a website for set a deadline and ensure you work towards it. When you work towards a deadline, your employees also learn to respect timelines and work towards meeting them. This also fosters a culture of reliability and interdependency.

Developing a strategic plan for your company will help to keep your business goals on track and manage your company's growth.

Analytix Solutions
The Company that CPAs Recommend
Analytix Solutions is a professional full-service business support solutions provider. The company offers comprehensive and scalable bookkeeping and accounting services while leveraging its expertise, experience, and state-of-the-art infrastructure. It offers multiple services in diverse packages for companies that are seeking a trustworthy and professional partner to give their business a head start.

Wiring An Accounting System

Accounting is an intrinsic part of any business, regardless of the industry in which your company operates. The same rules that apply to your personal finance also apply to running a business. More clients translate to more business, and this equates to an increase in the volume of transactions and records you need to review. At a minimum, you need sound bookkeeping to ensure that your accounting is in order. Bookkeeping practices determine how well your records are maintained, or how well your accounts and statements are balanced or reconciled. Seemingly small things such as recording receipts and invoices can be omitted inadvertently when you are in the midst of managing client needs and business matters. Often, these matters become a priority only as tax time approaches, and at that point you have a lot of things to accomplish - often with little time to spare.

Choosing automation
As an enterprise or a small business, you are likely to wonder, "Why bother taking my accounting system online?" For someone managing a startup, taking an accounting system online might seem like an expensive and time-consuming proposition. Few consider the immense benefits of taking the accounting and bookkeeping systems online. Automating your accounting could enforce better bookkeeping practices through diligent record-keeping. There are several smart programs that also help users choose different levels of accounting. Thus, you have software that does not just keep records; it also helps you track inventory and compile your tax-related information, as well.

Define your requirements
If your needs are outlined clearly, you will be better able to choose your software.

1. Assess Needs- Start by recording your needs so that you can evaluate and analyze them. If you have others working for you who will use the system, solicit their input, as well.

2. Gain Management Buy-in- What are the factors or attributes that steer the decision-making process in your organization? What are the hurdles you face in decision-making, or in the execution of an idea, or implementation of a plan? Do you see potential for improvement in this area if you were to implement automation? Based on the answer to this question, develop a list of areas that could benefit from automation.

3. List Areas that Could Benefit from Automation- Determining the actual cost savings on automating specific functions can be challenging. Don't worry - you are still in the process of assessing your needs. Check if the volume of work generated by your business currently involves manual labor for extended periods. Are those man-hours better invested elsewhere, for example, in bringing in additional revenue for the company? Compile a list of activities or chores similar to this, count the labor-intensive tasks, and analyze whether it would help to have them automated or not.

4. Leverage the Experts- Contact someone with the appropriate expertise who can assist with implementing the automation. Discuss the estimated number of saved "man-hours" with them and check whether they can help in automating certain processes of yours.

Analytix Solutions
The Company that CPAs Recommend
Analytix Solutions is a professional full-service business support solutions provider. The company offers comprehensive and scalable accounting services and bookkeeping services while leveraging its expertise, experience, and state-of-the-art infrastructure. It offers multiple services in diverse packages for companies that are seeking a trustworthy and professional partner to give their business a head start.

Accounting Systems Comparison - QuickBooks, Peachtree/Sage 50, And Intacct

As with many other industries, accounting is "going online". This is especially true for small to mid-sized companies. Fortunately, there are several software solutions on the market which are designed to simplify online accounting processes for startups and small businesses. QuickBooks, Intacct, and Sage 50 (previously branded Peachtree) are three such applications. Following is a brief comparison of these three software solutions.

QuickBooks
QuickBooks' parent company originally launched a software solution to assist with personal financial management. They soon recognized the need to offer a similar solution for small business owners. Today, QuickBooks is recognized as an essential tool to aid small businesses with their financial management. QuickBooks allows users to track their income and expenses, record bank information, organize tax-related information, and it also offers the option of data backup data for business continuity planning. QuickBooks also provides some versioning on the basis of business attributes such as General, Wholesale, Retail, Not for Profit, or Contractual. They offer programs for Accountants and Professional Services as well.

Sage 50
Sage 50, previously known as Peachtree Accounting, is another business management software program. Like most accounting software designed for small to mid-size businesses, Sage 50 also provides options for different business sizes, such as an entrepreneurship, small to mid-sized business, and a large business. Sage 50 accounting solutions include:
> Routine accounting and bookkeeping work, such as cash flow, payments and collections
> Insights for areas like cash flow management and benchmarking
> Explanations on key metrics
> Inventory tracking and purchase planning

Sage 50 solutions also offers system options on the basis of whether a business requires a full-time, dedicated, fully integrated accounting system; or one that is client or project dependent; or one that requires payroll management and necessitates the creation of budgets.

Intacct
Intacct is a cloud-based solution offering options such as accounting, financial management/reporting, as well as inventory and vendor management. Intacct offers solutions customized to various industries, including accounting, healthcare, hospitality, non-profit, and wholesale distribution.

Intacct offers many options for customizing your reports, including employee time tracking and management, vendor tracking for details like inventory management and purchasing, financial solutions like multi-currency management and global consolidations, and more. However, Intacct is a bit more complex than the previous two solutions and maybe better suited to a mid-size business than to a startup, depending upon the needs of the business.

Snapshot: Comparison

QuickBooks	Sage 50	Intacct
> Simplified and accurate financial management option, and offers significant support for bookkeeping and accounting functions such as batch entries, which save time for small businesses	> Simplified and accurate financial management options. Reliable management features and multiple inventory management methods for web-based accounting	> Offers multiple features for a wide variety of industries, including mid-size businesses.
> User-friendly navigation system; considered top cloud-based financial application	> Logical, easy-to-track workflow and reporting features	> Customizable dashboards. Provides users with options to support their clients’ accounting needs
> Inventory functionality is limited, and the program poses some integration problems; however, it integrates smoothly with most third party applications	> Robust options, although the inventory management is single location defined	> Powerful program that may contain features that are more complex than those required by a startup or a small business

No matter which solution you choose, a reliable accounting system will assist you in running your business more effectively.

Analytix Solutions
The Company that CPAs Recommend
Analytix Solutions is a professional full-service business support solutions provider. The company offers comprehensive and scalable accounting and bookkeeping services while leveraging its expertise, experience, and state-of-the-art infrastructure. It offers multiple services in diverse packages for companies that are seeking a trustworthy and professional partner to give their business a head start.

Five Key Components To An Efficient Accounting System. How Does Your System Rank?

Most businesses today have abandoned the notion of a "paper" accounting system. Although, businesses still refer to various accounting "books" and a "general ledger", these elements are all computerized. Technological advances have made accounting IT systems both feasible and affordable for even the smallest businesses to utilize. Both off-the-shelf and customized accounting solutions foster operational efficiency like never before, for any size business. These systems provide access to critical, consolidated automated reports for decision making. For any size company, there are five key components that must be considered when integrating an accounting system into your business.

1. Software Program- Today, there are multiple software programs from which businesses can select. Some are targeted towards a small business or micro business, while others are geared towards the needs of enterprise level companies. Consider what your own company's individual needs are, and select a software program that provides you with the flexibility and features you need to run your business. If you are unsure of your needs, consider working with a consultant or business advisor who can guide you in this decision. Often times, consultants and advisors have the expertise to customize off-the-shelf solutions if they do not fit your exact needs and provide the appropriate training, as well.

2. Existing IT Infrastructure- When selecting and integrating an accounting system into your business, the existing IT infrastructure component contains critical elements to evaluate. Network structure, number of desktop computers, printers, remote access, and current operating systems are all important considerations and may impact the accounting systems integration.

3. Data- Although it may appear obvious, the data collected for accounting purposes is a vital component to an accounting system. What is not always sufficiently evaluated, however, is determining what data is actually captured. Careful consideration must be given to the types of transactional or core business data that will be stored in the accounting database and the ease at which it can be accessed. Will the data be entered cross departmentally? For example, will vendor invoices requiring payment by purchasing be stored in the same database as payroll or timesheets? How will inventory be registered on financial reports?

4. Security and Internal Controls- When integrating an accounting system into a business structure, business owners must determine who has access to the system and at what security level. This includes not only password and login information or number of user licenses but also a determination on who can input data directly, cross-departmentally. Other considerations include system encryption for remote access, as well as system file back-up for business contingency planning.

5. Administration and Users- Finally, a key accounting system component which is often overlooked is the people who will actually serve as administrators on the system or as end users. The accounting system should be user friendly and simple enough so that those who need to use it every day readily recognize the improved efficiency of the system and adopt it into their daily routine. Additionally, the end users also need to be properly trained on the system so that both they and the company fully leverage the system's capabilities.

The person designated as system administrator should have sufficient working knowledge of both accounting and technology to properly train users and to make informed decisions about the previously referenced accounting system components. If they do not have this knowledge, they should consider hiring a consultant or business advisor who can assist with this so that the company can maximize a return on their investment.

Consideration of these five key components when integrating an accounting system into your business should facilitate an easy transition. We are currently offering a free analysis of your business processes and accounting system. If you would like to learn more on how Analytix Solutions can help move your business forward, 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.

Common Errors in Financial Reporting

Financial reports provide insights into a company's health and financial status for a particular time period. Financial reports are designed to provide data to the company's shareholders, including potential shareholders or investors. Thus, financial reports must provide accurate and relevant data to enable decision making. Relevant financial reports should contain enough data to assist investors in making key financial decisions for the business.

The International Accounting Standards Board has created the International Financial Reporting Standards (IFRS) to help bring about consistency in the standards of financial reporting. This also helps ensure uniformity in the reports that are produced. The IFRS explains how to state financial transactions within a report, thus making for a more standard format, across reports. The guidelines established by the IFRS make it easier for financial reports to be studied globally, without creating confusion due to different rules in different countries.

Despite set standards being followed in creating financial reports, there are still errors that surface and that can compromise the quality of a financial report. These can be related to errors of omission, or involve matters such as long-term debt. Errors can also occur when dealing with information accompanying the financial report.

1. Information accompanying report: When providing information including financial documents, care must be taken to ensure that corresponding references are present in the financial report, as well. Examples of accompanying information can include listings containing work schedules, accounts and expenses.

2. Long-term debt disclosure: Inappropriate disclosure of long-term debt is a common error. While the rule is that any long-term debt or borrowings must be disclosed, errors may include incomplete disclosures or debt details totally omitted out of human error or through calculation mistakes. Thus, insufficient disclosures may be made, or disclosures are not made at all, resulting in financial reporting errors.

3. Related party disclosure: When there is an exchange of money involved, there is a related party disclosure that is applicable. However, at times, this may not be reported appropriately. At times the amount or terms followed by both parties may not be correctly disclosed. This can result in an error.

4. Errors of omission: At times, reporting of costs may be incomplete, for example, expenses may be accounted for but costs involved in raising funds and revenues could get omitted in reporting. This could apply to events as well, where overhead costs are not documented properly or timesheets are not maintained.

When preparing financial reports for your business, take note to avoid the common errors listed above.

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.

Technology "Must Haves" to Run Your Business Efficiently

Embracing technology helps to optimize your business functions, regardless of your industry. Following are several tips that can optimize your work and provide you with measurable cost and time savings.

Basic IT infrastructure and cloud-based services

The existence of having even a basic IT infrastructure in place will help you in multiple ways, including streamlining your work. Moreover, with a basic IT infrastructure, you can tap into solutions such as managed services that provide access to more sophisticated infrastructure services on demand. Cloud-based applications are fast becoming the mainstay. You can harness the benefits of cloud technology and benefit from services including servers, storage space for back-up, and email. If you're a small business, configuring an IT infrastructure from scratch can be an expensive proposition. However, cloud services enable a small business to access a ready-to-use IT infrastructure without needing to purchase expensive equipment or hire expensive resources to run it.

Furthermore, cloud services can speed up your work, allowing you to focus on other business concerns.

Harnessing the Internet

Investing in a web presence can prove to be very useful for your promotion efforts. An engaging website is probably a potential customer's first introduction to your business. If your website is laid out attractively and is easy to navigate, the chances of your business being noticed by potential clients increases substantially. You can supplement your customer engagement efforts by also adding features like live chat and an efficient contact process.

Investing in Conferencing tools and VoIP

Small businesses can benefit from conferencing tools and well-managed voice over IP technology systems that allow you to interact and communicate effortlessly with your clients and your internal audience, including employees working in other geographic locations. Simple and basic conferencing tools do not need too much investment; but the returns are measurable. Sound communication and timely responses to concerns can boost morale for customers and employees alike.

Managed business services

Having professionals manage your back-up and admin needs can help you compete effectively in a competitive market. Access to professional expertise to deploy, manage, and maintain technical needs such as automation can help a business maintain its focus on deliverables. Tap into a vendor or organization with relevant expertise and maturity to ensure data integrity, safety, and essentials like technology back-up systems.

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.

Scalability As A Determining Factor For Outsourcing

Several factors determine whether or not outsourcing specific tasks is the best option for your company's needs. Scalability is one of these.

At the core of the scalability factor rests the theory that you only pay for what you use. This means that a small business can save a significant amount of money that would otherwise have been consumed by retainer costs. Several advantages exist to working under a scalability model:
> Allows for businesses to outsource only that portion of projects which may prove expensive to manage internally
> Augment existing staff or services during identified high-traffic or peak activity periods to better service clients and customers
> Ability to draw on and access key expertise areas when needed for specific aspects of projects or services without having to absorb costs for that expertise full time and "in house"

Determining Scalability
Scalability, by itself, is a major factor in determining what to outsource and to whom. The extent to which a vendor allows you to scale back operations can also influence the decision to outsource. Other factors that influence outsourcing on the basis of scalability could include some of the following elements:
> Scalability inherently requires some degree of automation. A vendor with high investment in the latest technology and understanding of how to integrate business requirements with tools and applications is best suited to offer scalability
> Scalability may not be applicable to all processes; in services that are people-driven, it may not be possible to scale back operations at all
> Understanding how much to scale back, and when, can be determined only by a vendor with significant maturity or experience
> An organization or a vendor offering scalability can demonstrate breadth and depth of services and have process-driven solutions with proven methodologies and strategies
> Executing scalability requires the existence of a quality infrastructure; To ensure a steady stream of business continuity, it is essential that the documentation process be thorough and structure applied at all stages to ensure success of the project time and again.

Scalability as a Reflection on the Vendor
A vendor who has invested significantly in training and coaching its manpower can ensure high returns for its clients by ensuring quality work. The combined experience of efficient automation with experienced human resources and input positions a vendor to offer relevant client solutions, consistently and repeatedly.

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.

Smart Financial Management for Small Businesses

How well do you know your tax and business laws? If you're an entrepreneur or a small business owner, you're already aware that laws and regulations for businesses differ from those for personal financial management. For most small businesses, providing clients with high quality products or services takes precedence over most other activities. Many small to mid-sized companies were launched to fulfill an entrepreneur's dream of running their own business or developing an extraordinary idea. Chances are, the business owner was not starting a company out of a desire to delve into the administrative and financial aspects of running a company. Therefore, it is critical for startups and small company to hire the right people for managing these aspects of their business.

What are a few ways to easily manage finances?

Find the right resource

Unless you have expertise in financial management, you are better off not managing your company's finances yourself. Hiring a good bookkeeping, accounting and financial resource can help minimize errors and ensure that reports include the essential data. The right resource can also help minimize financial losses and assist in streamlining accounts better.

Compare this with hurriedly-executed financial work completed by someone whose primary responsibility in your company is not accounting and bookkeeping. Furthermore, unless the employee managing the finances is trained on these functions, there is the likelihood for errors that can result in inadvertent fraud for your company.

Choose the right software

For most small businesses, budget crunches and constraints can pose limits on investments in infrastructure. In turn, this can impact client deliverables and therefore business growth. Alternatively, most businesses have shifted to online systems. This eliminates the need to hire and retain expensive manpower, thereby reducing the need to invest in additional office space, furniture, etc. The most important qualifications to consider when purchasing software are that the software meets your specific needs and enhances your client deliverables.

Automate and integrate systems wherever possible. This significantly reduces time spent on manual processes and costs, while improving adherence to deadlines and overall data accuracy. Most software programs eliminate time gaps between actual financial transactions and report generation, thus timely access to data and accuracy improves radically. Your basic bookkeeping or record-keeping is completed automatically.

If you are confused about what type of software is most appropriate for your business, there are many vendors who provide specialized services and can guide you in selecting the best software, as well as provide support for that program if required.

Keep costs of operation separate

A good way to ensure your operation costs remain separate is to outsource your work. When you outsource this work, you avoid locking up capital in areas such as infrastructure and salaries. Outsourcing is also available for critical functions such as bookkeeping and payroll management. In addition, outsourcing specific operational functions can provide you with the flexibility to pursue business development activities.

Following the above suggestions should assist in the financial management for your business.

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.