Excelsis Accounting Group – Page 2 – Accounting & Tax Tips Blog – Reno NV

Financial Analysis for Your Small Business

Comparing a business’s key financial ratios with industry standards and with its own past results can highlight trends and identify strengths and weaknesses in the business.

Financial statement information is most useful if owners and managers can use it to improve their company’s profitability, cash flow, and value. Getting the most mileage from financial statement data requires some analysis.

Ratio analysis looks at the relationships between key numbers on a company’s financial statements. After the ratios are calculated, they can be compared to industry standards — and the company’s past results, projections, and goals — to highlight trends and identify strengths and weaknesses.

The hypothetical situations that follow illustrate how ratio analysis can give company decision-makers valuable feedback.

Rising Sales, Rising Profits?

The recent increases in Company A’s sales figures have been impressive. But the owners aren’t certain that the additional revenues are being translated into profits. Net profit margin measures the proportion of each sales dollar that represents a profit after taking into account all expenses. If Company A’s margins aren’t holding up during growth periods, a hard look at overhead expenses may be in order.

Getting Paid

Company B extends credit to the majority of its customers. The firm keeps a close watch on outstanding accounts so that slow payers can be contacted. From a broader perspective, knowing the company’s average collection period would be useful. In general, the faster Company B can collect money from its customers, the better its cash flow will be. But Company B’s management should also be aware that if credit and collection policies are too restrictive, potential customers may decide to take their business elsewhere.

Inventory Management

Company C has several product lines. Inventory turnover measures the speed at which inventories are sold. A slow turnover ratio relative to industry standards may indicate that stock levels are excessive. The excess money tied up in inventories could be used for other purposes. Or it could be that inventories simply aren’t moving, and that could lead to cash problems. In contrast, a high turnover ratio is usually a good sign — unless quantities aren’t sufficient to fulfill customer orders in a timely way.

These are just examples of ratios that may be meaningful. Once key ratios are identified, they can be tracked on a regular basis.

Cash Flow Strategies for Cash-Strapped Businesses

Cash is critical to the functioning of every business. Maintaining a healthy cash flow not only allows a company to meet its financial obligations but also gives it the flexibility to take advantage of emerging opportunities.

All too often, however, small businesses find themselves in a cash crunch, struggling to pay the bills and stay afloat. The good news is that businesses can take various measures to manage cash flow more effectively.

Controlling Expenses

A good place to start is by reviewing expenses to determine if there are areas where you can shave costs by contracting with another vendor or renegotiating existing contracts. Costs for ongoing goods and services, such as utilities, shipping, and telecommunications, should be reviewed frequently to see if expenses can be reduced. And when paying suppliers, consider whether it makes financial sense to take advantage of any early payment incentives that may be offered.

Keeping Debt in Check

Debt can be a useful tool if used properly, so be sure to keep it at a manageable level. Before your business takes on a new loan, reach out to multiple lenders and compare the terms they offer. When acquiring equipment, consider whether leasing may be a better option than borrowing money to finance its purchase. For short-term financing needs, a line of credit is a helpful tool. The lender will base interest charges only on the amount your business draws from the credit line.

Managing Inventory

Maintaining excessive inventory can tie up cash unnecessarily. If your business carries inventory, avoid overstocking. Your inventory management system should be able to indicate the minimum quantities that you need to keep on hand in order to meet your customers’ needs.

Simplifying Billing and Collections

Employees who handle billing and collections should have specific, clear guidelines. By standardizing the process, you help ensure your business will be paid promptly. You can speed up payments by offering discounts for early payment or by encouraging your customers to pay using electronic funds transfer. To help minimize the problem of unpaid accounts, consider making follow-up calls or sending email or text message reminders within a set period after you have provided goods or services or when a bill’s due date passes. Minimizing Taxes When Possible

Deductions and credits can help your business limit its tax burden and boost its cash flow. A knowledgeable tax professional can keep you informed of any special tax breaks that may be of value to your business, such as the energy credit for the acquisition of various types of alternative energy property.

Make Planning a Priority

Identifying the causes of reduced cash flow and taking steps to rectify a cash flow crunch is critical to the ongoing success of your business. Proper cash flow planning can help you make better use of budgets and employ financing and capital more effectively to increase revenues as well as boost profits. If erratic cash flow is a recurring issue for your business, it can be helpful to gain the insights and the input from an experienced financial professional.

4 Tips on How Small Businesses Can Reduce Taxes

As a small business owner, tax liability is the money you owe the government when your business generates income. With changing laws and gray areas regarding deductions, exemptions, and credits, it’s no wonder small business owners rank taxes at the top of the list of the most stress-inducing aspect of business ownership. To reduce that stress, taxes shouldn’t be something to focus on only at year’s end. Use these tips on reducing your business tax year-round and see your taxes and stress level decrease!

1. Business structure

Your company’s business structure is how it is organized – it answers questions like who is in charge, how are profits distributed, and who is responsible for business debt. The most common business structures are:

Sole proprietorships have one owner who takes all profits as personal income. The owner is personally liable for any business debts.
Partnerships are structured like sole proprietorships but can have an unlimited number of owners.
C corporations have unlimited shareholders who each own part of the company. Profits are distributed as dividends between them. Owners are not personally liable for business debts.
S corporations are structured like C corporations, but the number of shareholders is capped at 100.

In addition to affecting how a business operates, business structure impacts how much a company pays in taxes. The U.S. tax code is complex and includes four main tax categories:

Income tax – paid on profits
Employment tax – employee Social Security and Medicare contributions
Self-employment tax – Social Security and Medicare contributions for self-employed individuals
Excise tax – special taxes for specific goods and services like tobacco, alcohol, etc.

IA sole proprietorship or partnership is a good idea for businesses wanting tax simplicity. For those with less than 100 owners, an S corporation might be the right fit and best tax option. Again, business structure and tax laws are complex and are best determined by a qualified, experienced accountant.

2. Net Earnings

Net earnings (i.e., net income or profit) is the gross business income minus business expenses. Regardless of the business, it begins with gross income (the income received directly by an individual, before any withholding, deductions, or taxes), and allowable expenses are deducted to arrive at net income. How this figure is calculated is dependent upon business structure.

Net earnings are used to calculate business income taxes. Again, the calculation process differs slightly for different business structures. It is best to seek a professional to help with net earnings calculations for the proper calculation and maximum legal deductions.

3. Employ a Family Member

One of the best ways for small business owners to reduce taxes is hiring a family member. The (IRS allows a variety of options for tax sheltering. For example, suppose you hire your child, as a small business owner. In that case, you will pay a lower marginal rate or eliminate the tax on the income paid to your child. Sole proprietorships are not required to pay Social Security and Medicare taxes on a child’s wages. They can also avoid Federal Unemployment Tax Act (FUTA) tax. Consult a trusted accounting professional for details about the benefits of hiring your children or even your spouse.

4. Retirement contributions

Employee retirement plans benefit employees, but they can also be good for your small business. Employer contributions to an employee retirement plan are tax-deductible. They can also carry an employer tax credit for setting up an employee retirement plan. Again, this is a task an accountant can handle for you. They can guide you on retirement plan choices based on your business’s situation, employees, and other factors.

As a small business owner, you can deduct contributions to a tax-qualified retirement account from your income taxes (except for Roth IRAs and Roth 401(k)s). Sole proprietors, members of a partnership, or LLC members can deduct from their personal income contributions to their retirement account.

As with any tax situation, consulting your trusted accounting professional is always best. They are up to date on the latest tax laws, information, and allowable deductions. By being aware of ways your small business can reduce taxes, you can bring these topics up with your accountant, discuss the best options for you, and be prepared long before tax time rolls around.

Contact our tax professionals to learn more about how you can control tax exposure for your small business.

Starting a Side Gig in 2022? Your New Tax Obligations

It’s not just self-employed individuals who must pay estimated taxes. Here’s what you need to know.

W-2 income tax withholding isn’t perfect. You’ve probably had years when you owed more than you expected to on April 15. Or you were pleasantly surprised to receive a sizable refund. The idea, of course, is to try to come out as even as possible. You can usually do this by adjusting your withholding when you experience a life change like taking on a mortgage or having a baby.

Income taxes are also pay-as-you-go for self-employed individuals – or at least they should be. If you’re striking out on your own by starting your own small business in 2022 or you’re simply taking on a side gig to improve your finances, your tax obligation will change dramatically. Your income will not be subject to employer withholding every week or two. In most cases, you’ll get it all. But the IRS expects you to pay estimated taxes on that income four times a year.

Who Else Must Pay?

There are other situations where you’ll be expected to make quarterly payments. In fact, the only individuals who aren’t required to pay estimated taxes (besides W-2 employees whose withholding is on target) are those who meet all three of these conditions:

You owed no taxes the previous tax year (line 24 on your 2021 1040—total tax—is zero, or you weren’t required to file a return).
You were a resident alien or U.S. citizen for all of 2021.
Your 2021 tax year covered a 12-month period.

tax tips

You’ll find your total tax for 2021 on line 24 of the Form 1040. Notice, too, that line 26 asks for 2021 estimated tax payments.

There are numerous situations where individuals who have payroll taxes regularly withheld on their income may still be required to submit quarterly estimated taxes. For example, did you receive income from rents or royalties? Dividends or interest? Income from selling an asset? Gambling?

If you have an employer who withholds taxes, but you don’t think you’ll be paying enough given the deductions and credits you might receive, you need to plan for estimated taxes. Self-employed individuals are almost always required to submit them.

Special Rules for Some

As with all things IRS, there are many exceptions to the rules regarding estimated taxes. For example, there are special rules for:

Fishermen and farmers.
Some household employers.
Certain high-income taxpayers.
Nonresident aliens.

How Do You Estimate Your Quarterly Taxes?

That’s the hard part, especially if you’re new to the world of estimated taxes. There is no magic formula, no way to calculate to the penny what you’ll owe. You’re basically making an educated guess. Since you won’t know for sure what changes to the tax code will be put in place until the end of the year, you can’t be absolutely certain that you might get a particular credit or deduction.

But you know roughly what your income will be for a given quarter once you’re nearing the end of it. Do you have a lot of business-related expenses? Keeping track of those is critical, as they’ll offset your income. If you don’t, you’ll have to budget for a heftier quarterly payment. And you must keep in mind that you’ll be paying self-employment tax – that portion of your income taxes that your employer used to pay.

Once you’ve been self-employed for a full tax year and have seen what your tax obligation was, it will be easier to estimate in subsequent years. But you may have a difficult time your first year.

How Do You Pay Estimated Taxes?

tax tips

Individuals and business that had to pay estimated taxes in 2021 submitted the Form 1040-ES four times. If you’re self-employed in 2022, you’ll need to submit similar vouchers with your payments, unless you’re paying online.

If you’re self-employed and you anticipate owing $1,000 or more in taxes on your 2022 income, you’ll need to file quarterlies using IRS Form 1040-ES vouchers (available on the IRS website) along with a check or money order. There are also ways to pay online using a credit or debit card or direct bank withdrawal. Corporations would file the Form 1120-W if they expect to owe $500 or more.

Estimated taxes for the 2022 tax year are due:

April 18, 2022 (January 1-March 31, 2022)

June 15, 2022 (April 1-May 31, 2022)

September 15, 2022 (June 1- August 31, 2022)

January 16, 2023 (September 1-December 31, 2022)

A Challenging Task

Estimated taxes are not precise. And it may be difficult to set aside money for them if your income is not where you’d like it to be. But as you might expect, the IRS will levy penalties on you if you don’t.

Year-round tax planning can help you in this critical area. We’ll be happy to set aside time to consult with you about estimated taxes. We’re also available to do tax preparation and to look at how your taxes fit into your overall financial situation. Contact us soon to get a jump on the 2022 tax season — or to finish up 2021.

How to Overcome Accounting Challenges Most Small Businesses Face

Perhaps the number one action you can take to support the financial health of your small business is to stay on top of accounting. Make sure you’re aware of most small businesses’ accounting challenges and learn how to overcome them. We’ll tell you how here!

Banking

You’ve been banking for years, and you know how to manage the task. However, when you own a business, banking isn’t like managing personal checking and savings accounts. Unfortunately, many small business owners use their personal funds to pay for business expenses, especially when first starting out. Even small costs add up over time. This “cross contamination” of spending between personal and business accounts can lead to costly mistakes, not to mention headaches for your accounting team. Keep personal expenses, and business expenses separate all the time. Have dedicated bank accounts and credit cards only used for one or the other. If you need to track down an expenditure, you only need to look in one place.

Budget

When bank accounts are separated, budgeting becomes exponentially easier. You can even use an accounting software program to help you keep up with money coming and going to and from your business. However, recognize that simply entering information into a software program is not the end of the work when balancing a budget. Thinking that is true ends up being the downfall of many small businesses. Budgeting for a business means forecasting to ensure that unexpected expenses can be covered, managing inventory, taxes, and more. A shift in any direction can throw off any budget. That’s why many small businesses opt to outsource their accounting. The known upfront expense of doing so can far offset costly budgeting errors down the road.

Unexpected expenses

As mentioned above, you must consider the unexpected as part of your budget. Additional (new) taxes, payment delays from customers, rising costs of materials and supplies, new employee training, etc., are all possibilities. A qualified accountant is aware of these unexpected expenses and others that your business could face and knows how to prepare you for them. Awareness of what could financially happen in business is crucial to long-term profitability.

Payroll

While unexpected expenses are likely the most daunting for a small business, payroll is almost always the most significant. Payroll entails more than what you pay employees. New employee classification, if incorrect, could cost you a bundle in penalties. Other payroll-related accounting challenges are pay accuracy, proper tax filing, compliance, and paid time off tracking.

Unless you’re an HR professional, and chances are you’re not if you’re the business owner, consider recruiting a qualified accountant to help you manage payroll. It will save you headaches in the short term and money in the long term.

Taxes

A conversation about accounting and small business isn’t complete without discussing taxes. The tax struggle can be daunting, from filing to making sure you pay enough but that you don’t overpay. A significant challenge regarding taxes is merely keeping up with the ever-changing tax laws. A qualified accountant or CPA will be up-to-date on new regulations and guidelines so that you don’t have to be.

Overcoming accounting challenges like these is easy with a qualified accounting team on your side. Consider outsourcing your accounting needs so that your focus remains where it should – on running your business your way.

Contact our accounting professionals now for help managing your small business finances.

Getting Started with Reports in QuickBooks Online

You should be running reports in QuickBooks Online on a weekly—if not daily—basis. Here’s what you need to know.

You can do a lot of your accounting work in QuickBooks Online by generating reports. You can maintain your customer and vendor profiles. Create and send transactions like invoices and sales receipts, and record payments. Enter and pay bills. Create time records and coordinate projects. Track your mileage and, if you have employees, process payroll.

These activities help you document your daily financial workflow. But if you’re not using QuickBooks Online’s reports, you can’t know how individual elements of your business like sales and purchases are doing. And you don’t know how all of those individual pieces fit together to create a comprehensive picture of how your business is performing.

QuickBooks Online’s reports are plentiful. They’re customizable. They’re easy to create. And they’re critical to your understanding of your company’s financial state. They answer the small questions, like, How many widgets do I need to order?, and the larger, all-encompassing questions like, Will my business make a profit this year?

Getting the Lay of the Land

Let’s look at how reports are organized in QuickBooks Online. Click Reports in the toolbar. You’ll see they are divided into three areas that you can access by clicking the labeled tabs. Standard refers to the comprehensive list of reports that QuickBooks Online offers, displayed in related groups. Custom reports are reports that you’ve customized and saved so you can use the same format later. And Management reports are very flexible, specialized reports that can be used by company owners and managers.

Standard Reports

The Standard Reports area is where you’ll do most—if not all—of your reporting work. The list of available reports is divided into 10 categories. You’re most likely to spend most of your time in just a few of them, including:

Favorites. You’ll be able to designate reports that you run often as Favorites and access them here, at the top of the list.
Who owes you. These are your receivables reports. You’ll come here when you need to know, for example, who is behind on making payments to you, how much individual customers owe you, and what billable charges and time haven’t been billed.
Sales and customers. What’s selling and what’s not? What have individual customers been buying? Which customers have accumulated billable time?
What you owe. These are your payables reports. They tell you, for example, which bills you haven’t paid, the total amount of your unpaid bills (grouped by days past due), and your balances with individual vendors.
Expenses and vendors. What have I purchased (grouped by vendor, product, or class)? What expenses have individual vendors incurred? Do I have any open purchase orders?

The Business Overview contains advanced financial reports that we can run and analyze for you. The same goes for the For my accountant reports. Sales tax, Employees, and Payroll will be important to you if they’re applicable for your company.

Working with Individual Reports

To open any report, you just click its title. If you want more information before you do that, just hover your cursor over the label. Click the question mark to see a brief description of the report. If you want to make the report a Favorite, click the star so it turns green. And clicking the three vertical dots opens the Customize link.

When you click the Customize link, a vertical panel slides out from the right, and the actual report is behind it, grayed out. Customization options vary from report to report. Some are quite complex, and others offer fewer options. The Sales by Customer Detail report, for example, provides a number of ways for you to modify the content of your report so it represents exactly the “slice” of data you want. So you can indicate your preferences in areas like:

Report period
Accounting method (cash or accrual)
Rows/columns (you can select which columns should appear and in what order, and group them by Account, Customer, Day, etc.)
Filter (choose the data group you want represented from several options, including Transaction Type, Product/Service, Payment Method, and Sales Rep)

Once you’ve run the report, you can click Save customization in the upper right corner and complete the fields in the window that opens. Your modification options will then be available when you click Custom reports, so you can run it again anytime with fresh data.

QBO tips

You can customize QuickBooks Online’s reports in a variety of ways.

We’ll go into more depth about report customization in a future issue. For now, we encourage you to explore QuickBooks Online’s reports and their modification options so that you’re familiar with them and can put them to use anytime. Let us know if you have any questions about the site’s reports, or if you need help making your use of QuickBooks Online more effective and productive.

Congress, Don’t Give the IRS More Responsibilities by Mark Bailey CPA

Tax season can be a stressful time for many hard-working Nevadans. Our tax code is complex, and taxpayers can wait months to receive their tax refunds. As a long-time certified public accountant in Reno, I have spent my career helping businesses and residents navigate our complicated tax code. That is why I am worried about proposals being debated in Washington, D.C., that would expand the authority and mandate of the Internal Revenue Service to automatically generate tax returns on behalf of all Americans. Although this proposal may seem like a way to streamline the tax collection process, it would overburden an already strained IRS and create a conflict of interest that would harm taxpayers.

The IRS serves an important role in our country. The federal government needs an agency that can effectively and efficiently collect revenue to fund social spending programs, national defense, and other critical government functions. The IRS getting its existing mandate right is and should always be the priority.

Adding more responsibilities to an already overstretched agency is inviting disaster. A recent report from the Treasury Department’s independent Taxpayer Advocate Service found that the IRS is woefully unprepared for the 2022 tax season. The agency warned taxpayers to expect, “one of the worst filing seasons.”

Under a government run tax preparation system, taxpayers will likely have to deal directly with the IRS to correct any mistakes or have any questions answered. A 2021 report from the Washington Post found that only 1 in 50 calls to the IRS help line was actually answered by a human representative. If one of my clients calls my office, or that of any CPA or tax professional, they know they will get a timely response.

On the other hand, as of December 2021, the IRS had yet to finish processing 6 million tax returns filed last season. This is especially concerning with the start of this tax season already underway.

Taxpayers will likely be forced to wait even longer to receive their well-deserved refunds. The same report from the Taxpayer Advocate Service found that tens of millions of taxpayers had to wait to receive their refund checks in 2021. This can cause real financial pain for families struggling to deal with rising inflation.

Proposals to create a government run tax preparation system present a clear conflict of interest. The IRS cannot be asked to collect revenue or audit taxpayers while simultaneously fighting for deductions and refunds for those same taxpayers. As a long-time CPA, I have experienced first-hand how many of my clients appreciate having an independent expert on their side when it comes to dealing with the IRS.
Whether it is a CPA or even a cheap private online tax preparation software, Americans want someone fighting for their financial interests. Our tax collection process should have a system of checks and balances.

U.S. Sens. Catherine Cortez Masto and Jacky Rosen, both Nevada Democrats, have always been pragmatic legislators who fight for sound policy. They know when a proposal is well-intentioned, but misguided. I urge both of our senators to work with their colleagues to reject any proposals that add additional burdens and responsibilities to an already overstretched IRS.

Mark Bailey is a certified public accountant and managing partner of the Reno-based financial consulting firm Excelsis Accounting Group.

Starting a Side Gig in 2022? Your New Tax Obligations

It’s not just self-employed individuals who must pay estimated taxes. Here’s what you need to know.

Who Else Must Pay?

You owed no taxes the previous tax year (line 24 on your 2021 1040—total tax—is zero, or you weren’t required to file a return).
You were a resident alien or U.S. citizen for all of 2021.
Your 2021 tax year covered a 12-month period.

tax tips

You’ll find your total tax for 2021 on line 24 of the Form 1040. Notice, too, that line 26 asks for 2021 estimated tax payments.

Special Rules for Some

As with all things IRS, there are many exceptions to the rules regarding estimated taxes. For example, there are special rules for:

Fishermen and farmers.
Some household employers.
Certain high-income taxpayers.
Nonresident aliens.

How Do You Estimate Your Quarterly Taxes?

Once you’ve been self-employed for a full tax year and have seen what your tax obligation was, it will be easier to estimate in subsequent years. But you may have a difficult time your first year.

How Do You Pay Estimated Taxes?

tax tips

Estimated taxes for the 2022 tax year are due:

April 18, 2022 (January 1-March 31, 2022)

June 15, 2022 (April 1-May 31, 2022)

September 15, 2022 (June 1- August 31, 2022)

January 16, 2023 (September 1-December 31, 2022)

A Challenging Task

Cash Flow Strategies for Cash-Strapped Businesses

Controlling Expenses

Keeping Debt in Check

Managing Inventory

Simplifying Billing and Collections

Make Planning a Priority

8 Accounting Tips Every Small Business Owner Should Know

As a small business owner, you probably think about tracking expenses and keeping up with tax deductions, but these aren’t the only critical accounting tips you should know. Whether you’ve been in business for a while or you’re a new start-up entrepreneur, read on for our 8 best accounting tips.

1. Outsource your bookkeeping.

For every business, bookkeeping is critical. This essential task is keeping organized records of your business’s income and expenses. If you’re like most small business owners, bookkeeping isn’t in your primary skillset. And even if it is, you probably don’t have time to crunch numbers and keep records. By outsourcing this critical task, you will free up your time; put this vital function in a professional’s capable hands and check one business owner-related stressor off the list.

2. Keep accurate records.

In addition to having someone overseeing your bookkeeping, it is up to you as the business owner to make sure you keep accurate records for your business. For example, you’ll need to account for:

Gross receipts are sales, deposits, credits, recipes, invoices, etc.
Expenses include all receipts, canceled checks, or anything else that shows the cost of doing business.
Fixed assets should be recorded so that annual depreciation can be calculated.

Pro tip: For tracking receipts, you may want to use a receipt scanning app on your smartphone. It makes it easy to scan and store receipts electronically instead of maintaining a large paper file.

3. Keep an accurate inventory.

Keeping accurate inventory records provides you with current data that reveals whether you can take on client requests or additional projects with inventory on hand and when you need to order stock. It also helps you identify trends over time and make basic predictions about your business operations. All of these factors allow you to plan and strategize about your business. This ability is critical to developing and maintaining a small business over time.

4. Separate personal and business accounts.

The most important reason to keep your personal and business accounts separate is taxes. As a business owner, you can deduct expenses like travel and office supplies; however, you must provide supporting documentation for these expenditures to claim them. Lumping personal expenses in with business expenses makes a tedious mess of separating expenses and could knock you out of some deductions. It is best to have a separate line of business credit, separate credit cards, and a separate bookkeeping system to be safe.

5. Have (and maintain) a budget.

You should have developed a budget when you created your business plan to make projections about revenue and expenditures. But beyond that, you must maintain a working budget at all times. This approach helps you stay on track with what you spend versus what you take in, and it provides accountability so that if you do get off track with your spending, it is readily apparent and can be corrected quickly.

6. Work with a tax professional.

When the average business owner attempts to complete their taxes, it costs them about 40 hours in valuable time. And even then, chances are, a professional’s help will be needed to ensure the business is getting all the deductions to which it is entitled. So why not start with a pro? After all, tax preparation fees are a tax-deductible business expense.

7. Plan ahead.

When a small business implements the accounting tips on this list, it allows for planning with accuracy. Accuracy is the key term. Anyone can guess what might happen, but only with accurate records and observations about business patterns can you confidently make targeted predictions. For example, a small business that tracks income and expenses can detect patterns that reveal the best time for large investments and expenses.

8. Monitor business performance with financial statements.

Again, we cannot emphasize the importance of logging income and expenses. It helps in the day-to-day operation of your small business and provides information about overall business performance. For example, income statements help your business determine profit or loss, a balance sheet shows assets and liabilities, and a cash flow statement shows how much money goes in and out of your business in a given time, as well as how much cash remains. These types of financial statements are also imperative when asking banks and investors to secure financing or funding.

With these eight tips, you can keep your small business on track, establish valuable patterns of business behavior, and make sound financial decisions for your business’s future.

If you would like help with some of these accounting tasks, contact us now.