Capitalized Leases and Section 179 Affects Local Business Accounting

Below is information that Business need to know about capital leases and how it affects their accounting. If you are getting new equipment changes may occur in the deductions. It looks as if the deductions are going to drop back to 25,000 in 2011.

If equipment can be purchased in 2010 it is highly recommend so tax codes changes will not effect your business.

Equipment can be a great way to get the benefits of a refund and using the increased revenue from the equipment to pay for the lease payment.

Medical equipment sales for units that provide ROI are going to be very strong towards the end of the year. Please plan accordingly and try to make purchase early to take advantage of low prices and not get stuck in a buyer frenzy.

For financial statement and tax purposes, a lessee should capitalize a lease if it meets at least one of the following criteria:

a. Ownership transfer test. The lease passes title to the lessee by the end of the lease term.

b. Bargain purchase option test. The lease contains a bargain purchase option.

c. 75% test. The lease term is at least 75% of the property's estimated economic life.

d. 90% test. The present value of the minimum lease payments is at least 90% of the property's fair value.

If the lease meets any one of these criteria, the leased asset should be recorded on the Company's financial statements along with the corresponding lease liability net of deferred interest. For tax purposes, the leased asset may be depreciated by the lessee and qualify for the Section 179 expense election. The maximum Section 179 dollar limitation is $134,000 for tax years beginning in 2010.

Clearwater CPA Accountant - Call Today To Schedule a Free Consultation.
Judy Driscoll CPA (Certified Public Accountant) Located at:
250 N. Belcher Road, Suite 100, Clearwater, FL 33765
Office 727-441-6829
Specializes in Business Accounting for: Audits, 401k Audits, and Financial Statement Reviews.

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Nominal Ledger in Computerized System

The nominal or general ledger is an accounting record which summarizes the financial affairs of a business. It is the nucleus of an accounting system. It contains details of asset, liabilities and capital, income and expenditure and so profit or loss. It consists of a large number of different accounts, each account having its own purpose or "name" and identity or code.

A nominal ledger will consist of a large number of coded accounts. A business will, of course, choose its own codes for its accounts.

It is important that a computerized nominal ledger works in exactly the same way as a manual, although there are some differences in terminology. For instance, in a manual system, the sales and debtors accounts were posted from the sales day book. But in a computerized system, the sales day book is automatically produced as part of the "sales ledger module". So it may sound as if you are posting directly from the sales ledger, but in fact the day book is part of a computerized sales ledger.

Inputs to the nominal ledger

Inputs depend on whether the accounting system is integrated or not.

�If the system is integrated, then as soon as data is put into the sales ledger module (or anywhere else for that matter), the relevant nominal ledger accounts are updated. There is nothing more for the system user to do.

�If the system is not integrated than the output from the sales ledger module (and anywhere else) has to be input into the nominal ledger. This is done by using journal entries.

�Regardless of whether the system is integrated or not, the actual data needed by the package to be able to update the ledger accounts includes:

1.Data

2.Description

3.Amount

4.Account code

Outputs from the nominal ledger

The main outputs apart from listing of individual nominal accounts are:

�The trial balance

�Financial statements

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Accounting Packages

Computer programs are the instructions that tell the electronics how to process data. The general term used for these is software.

Some application software is devoted specifically to an accounting task, for example a payroll package, a fixed asset register or a stock control package.

Other applications have many uses in business, including their use for accounting purposes. Packages of this sort that we shall describe are databases and spreadsheets.
One of the important facts to remember about computerized accounting is that in principle, it is exactly the same as manual accounting.

Accounting functions retain the same names in computerized system as in more traditional written records. Computerized accounting still uses the familiar ideas of day books, ledger accounts, double entry, trial balance and financial statements. The principles of working with computerized sales purchase and nominal ledgers are exactly that would be expected in the manual methods they replace.

The only difference is that these various books of account have become invisible. Ledgers are now computer files which are held in a computer-sensible form, ready to call upon.

Advantages and Disadvantages of Accounting Packages

Advantages
Advantages of accounting packages compared with a manual system are as follows.
�The packages can be used by not-specialists.
�A large amount of data can be processed very quickly.
�Computerized systems are more accurate than manual systems.
�A computer is capable of handling and processing large volumes of data.
�Once the data has been input, computerized system can analyze of data rapidly to present useful control information for managers such as a trial balance or a debtors schedule.

Disadvantages
The advantages of computerized accounting system far outweigh the disadvantages, particularly for large business. However, the following may be identified as possible advantages.
�The initial time and costs involved in installing the system, training personnel and so on.
�The need for security checks to make sure that unauthorized personnel do not gain access to data files.
�The necessity to develop a system of coding (see below) and checking.
�Lack of 'audit trail' it is not always easy to see where a mistake has been made.
�Possible resistance on the part of staff to the introduction of the system

Coding
Computers are used more efficiently if vital information is expressed in the form of codes. For example nominal ledger accounts will be coded individually, perhaps by means of a two-digit code: example
�00 - Ordinary share capital
�01 - Share premium
�05 - Profit and loss account
�22 - Purchases
�30 - Debtors ledger control account
�40 - Creditors ledger control account
�55 - Interest
�56 - Dividends etc

In the same way, individual accounts must be given a unique code number in the sales ledger and purchase ledger.

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Purchase Ledger in Computerized System

A computerized purchase ledger will certainly be expected to keep the ledger up-to-date, and also it should be able to output various reports requested by the user. In fact, a computerized purchase ledger is much the same as a computerized sales ledger; expect that it is a sort of mirror image as it deals with purchases rather than sales.

Input to a system

Bearing in mind what we expect to see held a ledger, typically data input into a purchase ledger system is:
�Details of purchase recorded on invoices
�Details of returns to suppliers for which credit notes are received
�Details of payments to suppliers
�Adjustments

Process in a ledger system

The primary action in updating the purchase is adjusting the amounts outstanding on the supplier accounts. These amounts will represent money owed to the suppliers. This processing is identical to updating the accounts in the sales ledger, expect that the sales ledger balances are debts (debtors) and the purchase ledger balances are credits (creditors). Again, the option item approach is the best.

Outputs from a system

Typically outputs in a computerized purchase ledger are as follows.
�Lists of transactions posted - produced every time the system is run.
�An analysis of expenditure of nominal ledger purposes. This may be produced every time the system is run or at the end of each month.
�List of creditors balances together with reconciliation between the total balances brought forward, the transactions for the month and the total balance carried forward.
�Copies of creditors' accounts. This may show merely the balance b/f, current transactions and the balance c/f. If complete details of all unsettled items are given, the ledger is known as an open-ended ledger.
�Any purchase ledger system can be used to produce details of payments to be made.
�Other special reports may be produced for, costing purposes, updating records about fixed assets, comparison with budget, aged creditors list.

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Know Your Basic Accounting Functions

The core functions of accounting are bookkeeping and financial reporting to managers and investors. However, the accounting department of a business is usually also responsible for payroll, cash inflows, cash payments, purchases and inventory, and property accounting. If these functions are not done efficiently and on time the business will not survive.

Many of these functions, and much of accounting, focus on business transactions. These are economic exchanges between the business and persons or other businesses that the business deals. Accounting means understanding how these transactions are accounted for. Most businesses carry on economic exchanges with six basic groups:
1) customers, who buy products and services,
2) employees, who are paid wages and salaries and are provided benefits for working for the business,
3) suppliers and vendors, who sell to the business,
4) debt sources of capital, who loan money to the business,
5) equity sources of capital, who invest in the business expecting a profit on the capital invested, and
6) the government, who collects various taxes.

There are also other events that have economic impact on the business that must be recorded, such as lawsuits, uninsured flood or other loss, severance pay to laid-off employees, and other non-planned circumstances and events.

The first core function of accounting is too keep track of and record all the above economic exchanges, while the second is to report it. Accountants prepare financial statements for businesses to report to managers and investors. The three most basic financial statements are the statement of financial condition or balance sheet, the income statement and the cash flow statement. Everyone in business should understand and know how to read these three statements.

The Balance Sheet

The balance sheet, or statement of financial condition, summarizes the assets owned by a business on one side and the sources of its assets on the other. Sources of assets are divided into two basic categories: liabilities and owners' equity. Some assets come from borrowing money or buying on credit that has not been paid yet. These are liabilities. The remaining assets come from owners' equity which consists of the money invested in the business by the owners and the profit the business has earned and retained. It is important to remember that the balance sheet is like a snapshot and only shows how much the business is worth on the day the balance sheet is drawn up.

You generally see balance sheets like this:

Basic Balance Sheet

List of Assets List of Liabilities

Owners Equity
Total Assets = Total Liabilities + Owners' Equity

Sometimes you will also see owners' equity referred to as net worth. This is computed as Assets - Liabilities = Net Worth. While this may imply that the business is worth the amount recorded in the owners' equity accounts, it does not necessarily mean the business could be sold for this amount. Much more needs to be addressed when determining the selling price of a business. Nevertheless, the balance sheet is an important report that indicates how much you have and how much you owe at a certain point in time.

The Income Statement

The Income Statement, or profit and loss statement, measures income and expenses. It summarizes the profit-making activities of the business over a period of time. One section of the report lists all income: earned, passive or portfolio. The other section of the report lists all expenses. It often looks like this:

Basic Income Statement

Income
- Expenses
= Net Income

Preparing income statements on a regular basis assist in measuring financial progress. Most managers and investors pay more attention to the income statements and you will often see abbreviated versions in the financial pages reporting the top line of sales revenue and the bottom line of net income.

The Cash Flow Statement

Cash flow refers to the stream of cash coming in as income and going out as expenses. The cash flow statement summarizes the sources and uses of cash in the business during a financial period. A successful business must manage both profit and cash flow, they do not equal each other. Cash flow statements often look like this:

Basic Cash Flow Statement

Part 1. Operating Activities. Cash flow from the profit making transactions of the business
Part 2. Investing Activities. Cash inflow and outflow from investing activities.
Part 3. Financing Activities. Cash inflow and outflow from the financing activities.

Summing the three types of cash flows from above determines the bottom-line net increase or decrease in cash during the period. Net cash flow from part one, operating activities, will not always match the profit reported in the income statement. This is because actual cash flow and expenses from sales are on a different time table that when sales revenue and expenses are recorded on the books. Profit performance of a business gets the most attention, but it is also important to understand and know the cash flow from profit and that is found in this important statement.

You do not need an MBA, nor do you need to be a CPA, to run a business. However, understanding basic accounting will assist you with the financial aspects of your business, investments, taxes, and financial management. You will be at a disadvantage if you do not understand accounting basics. If the accounting functions and three basic accounting statements covered in this section are new to you, it is imperative you seek out resources to learn more on this subject. If you already have a basic understanding of accounting principles and statements, make sure you are keeping on top of them in both your business and personal life.

Alain Burrese, J.D. is a performance and personal development expert who teaches how to live, take action, and get things done through the Warrior's Edge. Alain combines his military, martial art, and Asian experiences with his business, law, and conflict resolution education into a powerful way of living with balance, honor, and integrity. He teaches how to use the Warrior's Edge to Take Action and Achieve Remarkable Results. Alain is the author of Hard-Won Wisdom From The School Of Hard Knocks, the DVDs Hapkido Hoshinsul, Streetfighting Essentials, Hapkido Cane, the Lock On Joint Locking series, and numerous articles and reviews. You can read more articles and reviews and see clips of his DVDs as well as much more at http://www.burrese.com and http://www.aikiproductions.com

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QuickBooks Job Costing - Determining Equipment Costs Per Hour

Determining the cost-per-hour for each piece of equipment or machinery that your company owns and uses on a job site is a great tool for understanding, and even eventually, recouping the actual cost of the machine itself. Once you have this information, you can improve the accuracy of your bidding, book equipment and machinery costs in your accounting software, and even identify ways in which you can maximize expenditures throughout the year.

Equipment and machinery cost-per-hour rates are calculated by adding together three distinct pieces of information:

What it costs to own or lease (acquisition cost-per-hour) What it costs to maintain (maintenance cost-per-hour) What it costs to run operate it (running time fuel consumption cost-per-hour)

1. Calculating Acquisition cost-per-hour (ACPH)

Formula: Divide the total price paid (including interest paid) by the projected number of lifetime hours.

Example:

21" rotary mower purchase price: $1,100.00

Interest none

Lifetime hours: 750 hours (2.5 hours/day, 5 days week/30 weeks/year for 2 years)

Salvage value: none

Acquisition cost-per hour: $1,100.00 divided by 750 hours = $1.47 per hour

2. Calculating Maintenance cost-per-hour (MCPH)

Formula: Divide the estimated lifetime maintenance cost (repairs, parts, labor, blades, spark plugs, oil changes, filters, etc.) by the number of lifetime hours.

Example:

Lifetime maintenance cost: $600.00

Maintenance cost per hour: $600.00 divided by 750 hours = $0.80 per hour

3. Calculating Running-time Fuel Consumption cost-per-hour (RT/FC CPH)

Formula: Determine how long one gallon of fuel lasts for the piece of machinery. Divide the price per gallon of the fuel by the hours used each day.
Example:

Cost per gallon of fuel: $2.50

Running-time fuel consumption cost-per-hour: $2.50 divided by 2.5 hours = $1.00 per hour

Total Cost-Per-Hour: $1.47 Acquisition cost-per-hour (ACPH)$0.80 Maintenance cost-per-hour (MCPH)

$1.00 Running-time Fuel consumption cost-per-hour (RT/FC CPH)

$3.27

Let's look at another example, this time determining the cost-per hour for a compact tractor.

Purchase Price: $23,000.00

Interest: $ 5,520.00

Salvage Value: $ 8,000.00

Life Expectancy: 3,000 hours (300 hours per year for 10 years)

Lifetime Maintenance Cost: $18,000.00

Fuel Price: $2.50 per gallon

Fuel Used per hour: 1.5 gallons

Acquisition cost-per-hour (ACPH): ($23,000.00 $5,520.00 - $8,000.00 = $20,520.00)

$20,520.00 divided by 3,000 hours = $6.84

Maintenance cost-per-hour (MCPH): $18,000.00 divided by 3,000 hours = $6.00

Running-time fuel cost-per-hour (RT/FC CPH): $2.50 divided by 1.5 hours = $1.67

Total Cost-Per-Hour: $6.84 $6.00 $1.67 = $14.51

Notes: Your dealer should have data regarding estimated lifetime maintenance cost and fuel consumption. If you buy used equipment, cost it out using the "new" purchase price. The total cost-per-hour is usually the same for new and used equipment, and useful life, repair and maintenance costs, are easier to determine for new equipment. Using the new purchase price also automatically adjusts your rates for inflation and price increases.You can cost out leased machines using the same formulas and adjusting the life expectancy, lifetime maintenance and fuel price, to account for the shorter term.

To determine fuel cost, you can also fill up the tank and divide the fill-up price by the total running hours.

Even if you prefer to base your estimates on a per-labor-hour rate, the Cost-Per-Hour method prevents you from understating or overstating the actual equipment cost for the job being bid.

You can verify your Cost-Per-Hour figures in several ways:

Compare your hourly rates to those of your local equipment rental company. Reduce their rental rates by 40-50% to remove their markups. Your rates should be reasonably close to theirs. Contact your local dealer to verify maintenance costs, production rates, fuel consumption, lifetime hours, etc. Contact your local Department of Transportation (DOT) office, they have manuals containing CPH data for maintenance, and will often share these figures with you for comparison purposes.

Ways in which you can reduce your Cost-Per-Hour figures:

Take advantage of multi-unit discounts offered by some manufacturers. Check with your local dealer about new engine technologies. Use the CPH calculations to develop a better understanding of which piece(s) of equipment will lower your field operation costs over time.

You can also use the Equipment Cost-Per-Hour (ECPH) to develop a better understanding of which pieces of equipment, or brand, could actually lower your field operation costs over time. By matching up the purchase price of several different pieces of machinery against long-term variables, such as annual maintenance cost and serviceability, production rates, fuel costs, etc., the ECPH will help you to confirm the truth of you get what you pay for.

Armed with the knowledge of equipment cost-per-hour, bring this into your accounting program and job costing. This will help you to take the "guess-work" out of future bidding and increase your company's bottom line.

Once you know your Equipment Costs per hour, use QuickBooks to track these costs for job costing purposes by downloading our FREE 17-page eBook "Advanced Job Costing - Getting Equipment Costs into Job Costing" by clicking here.

Nancy Smyth is a Certified QuickBooks ProAdvisor and Intuit Gold Developer specializing in offering QuickBooks users an easy and efficient means of complying with Federal and State Prevailing Wage Laws and generate certified payroll reports from QuickBooks data. For additional information on Certified Payroll Solution - which integrates with QuickBooks, visit http://www.sunburstsoftwaresolutions.com.

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Accountancy Services Delivered Online

Over the past thirty years of so, we have seen the dramatic growth in computer technology. This of course brings with it many problems, but on balance makes life easier. This revolution has also changed the accountancy world. With the advancement of technology accountants are now able to deliver many of their services to clients without the need to meet with them face to face. This means that it is now practical for many accountants to deal with their clients on a national or international basis.

As such many firms of accountants have developed their services so many of them can be delivered remotely online. This can be particularly beneficial to owners of businesses that spend a considerable amount of time working away from home or prefer to deal with their accounting issues at a time that suits them.

Although many accountants offer this service it is understood that most business owners, and indeed accountants, prefer to deal with matters face to face wherever possible. However, it is worth considering the potential benefits.

What are some of the benefits?

Your accountancy/tax/business affairs can be dealt with by you at a time to suit you You can choose a firm of accountants that are based in an area of the UK with relatively low overheads, keeping their fees very competitive It reduces any commuting time to see your accountant It is normally possible to meet face to face if this is required Information can be transferred instantaneously over the internet How does it normally work?

The accountant tries to deal with most communications by email You should have a Director of your firm overseeing their service to you, who you will be able to contact by telephone The quality of the accountant's advice should remains at the standard at which services are normally delivered.You may wish to consider keeping your accounting records online

There are now a number of electronic book-keeping packages that are accessed over the internet. As such, you would be able to login to your accounting software package at anytime and anywhere in the world where there is an internet connection. The use of such packages is rapidly expanding. With many of these packages, it is also possible for your accountant to login to your data to give you remote assistance or business advice. Another advantage is that, as your data is normally stored remotely and backed up, there are less concerns over backing up your files.

If your business is based in an expensive area of the UK then it may be worth considering using an accountant in South Wales, where the professional fees may be cheaper and the service may remain unchanged.

Harries Watkins Jones, South Wales Chartered Accountants with offices in Bridgend and Pontypridd.

http://www.hwja-accountants.co.uk
http://www.accountants-bridgend.com

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Pass, Fail, Or Adapt? How to Respond to Changing DCAA Audit Rules

In the past year the DCAA has changed the "grading scale" when it comes to the auditing of accounting systems. The evaluation now operates on a pass or fail basis, with no exceptions. To make matters even worse for government contractors, auditors no longer provide suggestions for improvement and payments to the contractor may be suspended until the problems are corrected.

What does this mean for government contractors, particularly those less familiar with DCAA auditing standards? In these economic times, a suspension of payment could prove to be disastrous, especially for the small business owner, who cannot afford to survive even a short suspension. A follow-up review could take weeks or months and an audit determining your accounting system inadequate could prevent or hinder future contract awards.

So, what is a government contractor to do to avoid a failing review or bounce back from one? One possible solution could be to seek the efforts of an outsourced government accountant. These accountants are well-versed in DCAA regulations and requirements, and the more experienced ones may have the ability to perform a "mock' DCAA audit and highlight the problems in your current accounting system. Outsourcing your accounting efforts will alleviate the stress and overhead of running and managing an accounting department, as well as provide expert opinions and solutions.

For the government contractor with an accounting department already intact, there is also the option of purchasing a more comprehensive accounting system. Although the DCAA does not endorse any particular software programs, there are many available programs that can get the job done. QuickBooks and Peachtree accounting programs have the capability of being enhanced in order to meet the majority of DCAA auditing requirements, with the right expertise and customization. Other programs such as Jamis, Deltek, and Costpoint have been built for the purpose of government contracting and come pre-customized with all the functions necessary to meet compliance. Software programs such as these have been well developed to meet DCAA regulations, however require a rather large upfront investment.

It must be pointed out however, that whether you chose a pre-customized accounting program or choose to customize your existing QuickBooks and Peachtree programs, if you are not inputting the right information into the right G/L accounts, no accounting software will magically make you compliant.

DCAA rules and regulations are constantly evolving. Although, DCAA audits have always been a serious matter, now more than ever government contractors must stay on top of their game. Taking proactive efforts to ensure a DCAA compliant accounting system will go a long way in preventing a failing audit review, lost revenues, or the termination of one's government contract. All government contractors should take the time to become familiar with DCAA regulations, or at least hire a professional accountant who already is.

VBP OutSourcing (VBP) is an innovative and highly professional government consulting firm that has been providing high-quality financial and creative services to a diverse and successful client base for over 13 years.

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Outsourcing to Your Accountant

The small business owner usually finds that he has to fulfill a number of roles, such as operations manager, sales director, production worker, financial controller, health and safety executive, HR manager and book-keeper to name but a few! Many economic commentators have written extensively on this subject, it would seem that the common theme would be that the small business owner will develop his business further by working on his business rather than in it.

The small business normally functions under many constraints, the most common and important of these tend to be financial, output capacity and time. This leads us on to the old phrase "time means money". Most good accountants offer a number of services that the small business owner may wish to consider. Either on the grounds that they could do without the stress, or alternatively, they may find that it is more lucrative to pay an accountant to carry out basic compliance work, whilst they spend the time making money through your business.

In addition to the normal accounts and tax return completion, many accountants can offer the following outsourcing services which may be of particular benefit to the small business owner:

Payroll compliance - your accountant runs your payroll for you. They may calculate all tax and national insurance deductions. Advise you of employees maternity, sick and holiday pay and can even provide you with printed payslips. VAT compliance - this includes VAT return completion on your behalf, giving advice on various VAT schemes. Do you know if your business would be better off on a flat rate or cash accounting scheme? CIS compliance - accountants can advise on CIS implications for small businesses and ensure that all of their paperwork is up to date. Book-keeping- most accountants offer a number of book-keeping solutions. These can be either manual or computerised. Management information - how can the small business owner effectively run their business without up to date and relevant financial information. Their business may benefit from periodic cash flow forecasts and management accounts. Systematisation of the business - many very successful business have grown from small start ups to muti-nationals, owing much to the detailed systematisation of their business. Under this process every activity is documented, refined and improved to form a rigid system. Ideally a business should run smoothly without the hands on input of its owner. Sadly many small business owners avoid taking holidays out of fear of what will happen to their business on their absence.

This article has been written in relation specifically to UK small businesses however most of the content may be applicable to small businesses around the world.

Harries Watkins Jones, South Wales Chartered Accountants with offices in Bridgend and Pontypridd.

http://www.hwja-accountants.co.uk
http://www.accountants-bridgend.com

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Receipts Scanners, and How to Get Organized - Discover the Facts

Getting Organized And Scan Your Receipts For Accounting Purposes

This article discusses two concepts; 1- Scanning your receipts yourself with special scanner and software. 2- Scanning and organizing your receipts via online receipt scanners and at the same time keeping track of your expenses.

Organization can benefit a person in every aspect of life. It can certainly be beneficial when it comes to keeping track of receipts for purchases on items that will need to be accounted for later. Keeping up with everything on paper can take up a great deal of space and be difficult to go through when it comes time to look at the records. Having everything on file, easy to view, and in a printable version can be the best way to keep track of receipts. Continue reading and discover how to get organized and scan your receipts for accounting purposes.

Receipts can come in all different shapes and sizes and organizing them is never easy. It is always necessary to keep track of them for future reference whether it is to be checked against a credit card statement, or perhaps to save them for tax purposes. In order to keep them, you have to find a way to file them.

Creating files for every different type of receipt that you collect can create a huge amount of files. Just think of all of the space that is taken up. There is a better way available to keep track of all of those receipts and to view them and print them when they are needed. Modern technology can benefit us by automating this chore.

There is a software and scanner combo that will scan your receipts into the computer in order to keep up with them so that the paper will no longer be necessary. Not only will it scan and keep up with the receipt, but it can place it into different categories. When tax season rolls around next time, there will be no question where the receipts are for a particular expense. You can also take advantage of online receipt scanning services, the ultimate solution to your bookkeeping tasks.

The software does all the work when it starts scanning. It crops the image, sizes, and rotates the image. It can read the information from the receipt about eighty percent of the time, without any input. It also learns from previous behavior from you.

The information that it is able to obtain is surprising. It can read vendor, date, amount, and payment type. There is a place where a comment can be added to each transaction. There is also a place to code, or place information regarding what the receipt should be classified as. It is important to realize that time is money, and the less time we dedicate to paperwork organization, the more time we have for what we really like to do. You know what I mean: biking, swimming, dinning, socializing, playing tennis, or simply watching a sunset!

Online receipt scanners not only scan the receipts, but it will work with some of the most popular accounting software available. You can scan and keep track of all of your expenses at the same time. Just think how much time this can save.

Transactions can also be created without scanning in a receipt if necessary. If a receipt cannot be read, or if a transaction needs to be entered manually for some reason it is not a problem. The software is completely user-friendly.

Now all of the expenses can be reported and tracked at the same time just by scanning. Forget the old way of keeping messy paper files that take up way too much space. Scan all of your receipts and make your accounting easy and fun.

You can optimize this process and make it even simpler. I suggest to investigating further and finding out how you can save time, by totally automating this task.

Nooshin's idea of paperwork is "The Less Time Spent on Paperwork, the More Time for Other Important Things in Life."
Accounting Concepts
Receipt Scanners

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Running a Bookkeeping Business

There is an old saying that "a poor plan well executed is better than a good plan poorly executed." This saying applies very well to running a bookkeeping business. The reason most people fail when they start this type of business is usually not due to a lack of vision or intelligence. People simply fail to execute their plans.

There are a lot of bookkeeping business plans available on the Internet. Most of these plans involve learning basic bookkeeping skills and then finding clients. It's a pretty straightforward plan, albeit difficult.

There are several ways to learn basic bookkeeping skills. One of them is to attend a University and earn a degree in accounting. Accounting majors graduate with a solid understanding of basic accounting principles. Most accountants don't like to think of themselves as bookkeepers, but the truth is they understand the principles behind bookkeeping very well.

Many people with a degree in accounting have no idea how to set up an accounting system for a small business. This is something that comes with practice and experience. In school, accountants are taught the principles of accounting, but they aren't generally taught how to step into a business and set up that business' accounting system.

If you don't want to drop four years earning a degree in accounting just to start up your own bookkeeping business, there are other ways to obtain the knowledge you seek. A quick search on Google will reveal some of the quicker courses you can take online or with a community college. These courses tend to be much more practical and they give you advice on how to use accounting software (something else that isn't really taught in the big Universities). Most of these courses will cost you some money, but many are very affordable.

After you have the basic training down, it's time to get your first client. Finding the first client can sometimes be the most difficult. At this point you probably don't have any experience behind you and most people don't want to outsource their bookkeeping to someone who has never done bookkeeping before. To overcome this obstacle there are several options:
(1) Try teaming up with somebody who does have some experience. After you've done a few jobs, then you can go out on your own.
(2) Try to find a friend or family member who is willing to take a chance on you.
(3) Try offering your services at a discounted rate, or even free, until you pick up that first customer.

On your first job, put everything you have into it. Really do a good job and you will find that your first client will refer other clients to you. The best way to find new clients is from existing clients. A simple, "Do you know anybody else who might benefit from my services?" will get you a surprising amount of customers.

The blueprint for starting a bookkeeping business is not rocket science. You simply need to understand basic bookkeeping skills and find clients. However, most people fail to execute this simple plan.

Mandi enjoys learning and writing about accounting. Many people believe they should spend a lot of time on their bookkeeping business plan. However, Mandi believes that their time is ill-spent. Sometimes with an accounting service like bookkeeping the best thing to do is just jump right in and do your best.

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5 Free Things You Can Do Today to Get Bookkeeping Clients

Do you find yourself struggling to get bookkeeping clients for your business? Many freelance bookkeepers are faced with this problem after the initial excitement of setting up the bookkeeping business has worn off. If you are one of those people and you also have a limited advertising budget, here are five ways you can promote your business that won't cost you a red cent.

1. Talk to Someone:

You'll find that the more people you inform about your business, the more you'll discover people who know someone needing a bookkeeper. So tell everyone you come across that you are a freelance bookkeeper. Referrals are usually the number one method when you want to get bookkeeping clients.

2. Place an Ad on Craigslist:

Find your local city and place an ad under the "Services - Financial" section of Craigslist advertising your bookkeeping business. Don't post your phone number online unless you are comfortable doing that. Instead, have potential clients email you for additional information confidentially through Craigslist.

3. Chat on a Forum:

Find an online forum that is in the same category as the type of businesses you are targeting for your bookkeeping business. For example, if you are looking for plumbers, find a forum that plumbers like to hang out in. Make helpful posts without promoting yourself, as this could get you banned from the forum. You can however, add a signature to your profile promoting your bookkeeping business if the forum allows it.

4. Setup a Squidoo Lens:

This is a free way to promote your business which is almost as good as having your own website. Setting up a Squidoo lens will take about 30 minutes of your time and will get you listed in the Search Engines. If you use relevant keywords such as "your city name bookkeepers", potential clients will be able to find your bookkeeping business listed in local Google searches.

5. Write an Article and Submit it to an Article Directory:

If you have a talent for writing, put together some articles that would be helpful to small business owners and submit them to article directories. You should have a link in the bio section that goes to either your bookkeeping website or Squidoo lens.

As you can see, promoting your business so you can get bookkeeping clients doesn't have to be expensive. As along as you make an effort every day to build your client base, you'll soon have more clients than you can handle.

Sylvia Jaumann has been a bookkeeper for over 18 years and has created many resources for the freelance bookkeeper. If you're looking for more information so you can get bookkeeping clients Check out GetBookkeepingClients.com

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CPA Checklist - What to Bring to Your First Meeting

A Certified Public Accountant (CPA) typically bases their rates at least partially on an hourly basis. Because of this, it's in your best interest to be organized and efficient with your paperwork so they don't have to spend a lot of time requesting pertinent documents and information from you. To help speed along the process and save yourself some money, make sure your bring all of the following to your first meeting with your CPA.

A completed tax organizer - This is a form that has all your necessary basic information for your account. Some CPAs will have their own form for you to fill out. Otherwise, you can find basic tax organizers online.

Last Year's Tax Return - This is essential for new clients. Always keep your returns on file so your tax preparer has a good starting point.

Form W-2 - Ask your employer for this if you haven't received it yet.

Form 1099 - You'll receive this from your banks and investment accounts or from anyone who's retained you as an independent contractor.

Form 1098 - If you own a home or property, your mortgage company will forward you this information.

Brokerage statements - Bring these in for each of your stock, bond or investment accounts for the year.

Closing statements - If you bought, sold or refinanced real estate in the tax year, bring your closing documents.

Any notices from the IRS or other taxing authorities - If you received any letters about your taxes or tax situation from your city, county, state or the IRS, bring these with.

Schedule K-1 - This form is for income or loss form S-corporations, partnerships and other legal entities.

State specific forms - Some states require additional forms or documentations for exemptions and deductions. For example, Seattle and Bellevue businesses have to pay Business & Occupation (B&O) taxes according to Washington State tax law.

Aside from these documents, you'll want to bring in any other supporting documents. That includes schedules, checkbooks, receipts for charitable donations and business purchases, information regarding deductible expenses and any documents relating to self-employment income or other miscellaneous income.

Being organized when it comes to working with a CPA pays off in many ways. You'll save time and you'll ensure that your tax return is filed in a correct and timely fashion, which decreases your chances of paying penalties or being audited. Ask your CPA what you should bring to your first meeting and get started off on the right foot.

Tax CPA John Huddleston has a law degree and masters in tax law from the University of Washington School of Law. He has been a guest tax expert on the radio. He advises small businesses in the Seattle Bellevue Tacoma & Everett area on various tax and accounting issues. His firm, Huddleston Tax CPAs, also provides tax preparation service, quickbooks consulting, business valuation, general accounting and bookkeeping service. Profile information on CPA John Huddleston and the CPAs employed by Huddleston Tax CPAs is available at CPA tax accountant profile. Seattle CPA John Huddleston is a frequent publisher of tax saving ideas.

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How to Find the Best Business Banking Account For Your Business

There is something that every business around the world has in common, and that is banking. Banking is an important part of any business, but how do you know what type of account to set up when you first start up your very own business? This article will give you some information and tips to think about when setting up a business banking account for your business.

One of the first things you need to do, is work out what bank you will want to deal with. There are many different banks that offer these features for all types of businesses. When choosing a bank why not talk to some of the friendly staff about what you are looking for in an account. By asking around and comparing banks you will be able to find the one that is offering the most for your business.

One of the next things to look at is the fees that may come with these features. Fees are a common thing in everyday life, but that does not necessarily mean that you have to deal with them. Check for fees that may come with them and when they are taken out. This will give you an idea of what you will be getting if you choose a certain account. Remember to always compare so you can get the best deal.

Another thing to think about is setting it up for online or internet banking. This form of banking allows the user to easily access their account at any time of the day or night. By setting your banking to the online option, you can easily do all your payments and transactions over the internet without having to visit your local bank. If you are interested in this particular option why not talk to your local bank for to help you set it up. This will save you a great deal of time that can be spent doing other things.

So if you are looking to get the most out of your banking, why not see your bank for better banking options. Not only will you be able to save money and keep a record of all your history, you will have peace of mind knowing the money is well taken care of and properly organized.

So why not talk to your local bank and see what healthy choices you can make to improve your financial future. If you do not understand anything, be sure to ask for assistance. Do not go into anything if you do not understand something, this way you will not be paying for something you do not want or need.

Looking to find the Best Business Bank Account in the UK? We've got the low down now on http://www.bestbusinessbankaccount.org.uk

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What Everybody Ought to Know About For Sale by Owner in an Accounting Practice Sale

A while back we put out some statistics comparing our practice sales results to some For Sale by Owner (FSBO) statistics we received from the AICPA. The comparison raised a lot of questions from practice owners on both the buy side and sell side of future transactions. Today, I want to address the questions I most often receive from those thinking of selling a practice.

The main question I receive from potential sellers revolves around how shocking the FSBO numbers are:

Why, when people sell on their own, do they settle for such high risk transactions - Like no money down, percentage of collection deals?

The answer primarily lies in the emotion tied to selling a practice to an unknown person. One of the biggest questions looming for any practice owner is "who can run my practice?" or perhaps more accurately "who can I trust to turn my practice over to?" In our experience, this question can have incredible importance to a degree that the answer carries higher priority than price or terms.

Often, this is where the FSBO seller starts. Who do they know? Who do they trust? Who is just like them and will get along with the clients? It might be the practitioner down the hall, the one they have spoken with for years at the chapter meetings or a friend of a colleague they have heard great things from.

Starting with this base of known practitioners immediately limits the market the FSBO will explore. Then the FSBO, having identified their buyer, has the job of convincing the buyer to buy. Fair Market Value of a business is defined as the value of a transaction in which "neither party is operating under compulsion". In transactions we develop, we see value being defined by a seller and a buyer both operating under compulsion. In the FSBO transaction we have just outlined, the seller is typically under more compulsion than the buyer. In many cases, the buyer may have no compulsion and in fact may believe they are doing the seller a favor.

The disparity in the statistical comparison is due to the fact that we, like most business intermediaries and unlike FSBO sellers, do not pursue a single buyer. We work to create a market of buyers around the sale of a specific firm and let the market determine the price and terms.

Ken Berry
Principal and Vice President
Ken Berry has worked closely with John Ezell and ProHorizons since June of 2002. During that time he defined, developed, and refined ProHorizons' internal processes, ProHorizons' role in the accounting practice sales industry, and ProHorizons' level of service to and communication with its existing and potential clients. In 2005, he joined the team as a full-time broker. In January 2007, he joined John Ezell as a principal/owner of ProHorizons.

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Accounting Rate of Return

The accounting rate of return, also known as the return on investment, uses accounting information, as revealed by financial statements, to measure the profitability of an investment. That is the ration of the average after tax profit divided by the average investment. The average investment would be equal to half of the original investment if it were depreciated constantly. Alternatively, it can be found out by dividing the total of the investments book values after depreciation by the life of the project. Thus, is an average rate and can be determined by the following equation,

Accounting rate of return = Average income / Average investment

Acceptance rule

As an accept or reject criterion, this method will accept all those projects whose It is higher than the minimum rate established by the management and reject those projects which have rate less than the minimum rate. This method would rank a project as number one if it has highest accounting rate of return and lowest rank would be assigned to the project with lowest accounting rate of return.

Evaluation of Accounting Rate of Return

That method may have some merits:

�Simplicity. That method is simple to understand and use.

�Accounting date. The accounting rate of return can be readily calculated from the accounting data; unlike in the net present value and internal rate of return methods, no adjustments are required to arrive at cash flows of the project.

�Accounting profitability. For this method rule incorporates the entire stream of income in calculating the projects profitability.

It is a method commonly understood by accountants, and frequently used as a performance measure. As a decision criterion, however, it has serious shortcomings.

�Cash flows ignored. It uses accounting profits, not cash flows, in appraising the projects. Accounting profits based on arbitrary assumptions and choices and also include not-cash items.

�Time value ignored. The averaging of income ignores the time value of money. In fact, this procedure gives more weight age to the distant receipts.

�Arbitrary cut off. The firm employing that rule uses an arbitrary cut-off yardstick. Generally, the yardstick is the firms current return on its assets (book-value). Because of this, the growth companies earnings very high rates on their existing assets may reject profitable projects with positive net present values and the less profitable companies may accept bad projects with negative net present values.

http://professional-edu.blogspot.com/2010/02/136-accounting-rate-of-return.html

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How to Choose the Right Accountant

Professional and experienced accountants play a key role in the efficient running of businesses and organizations of all kinds, ranging from one-person operations to giant global corporations. Provided, of course, that they are able experienced and qualified to able offer the right expertise. It is not just for annual tax returns that people rely so much on the vital services they provide either. Accounting involves much more than just filling out tax forms at the end of the year. Accountants are also responsible for keeping accurate financial records for individuals and companies.

These records detail vital information for the business such as whether a company is making a profit or whether it is suffering a loss. The accountant analyzes the financial records so that problem areas can be identified and corrected and opportunities spotted and acted upon. Having the right accountant or accounting firm on your side can help solve a whole range of economic issues. Finding the right accountant isn't just about having them identify problems but on getting the right advice on making your business run more efficiently, increasing profits and encouraging growth. The accountant takes the role of adviser or consultant in this regard. The client ideally works closely with the accountant, reviews the accountant's advice and then makes informed adjustments as needed.

The best qualified accountants, of course, should display a very high degree of mathematical aptitude, strong analytical skills, a great eye for detail. And be very good at working with people too. This last aspect is vital to ensuring the highest standards are met, yet is often an overlooked aspect in traditional accountancy. In addition to being highly knowledgeable, they must abide by codes of professional conduct. They must act ethically, uphold client confidentiality and avoid conflicts of interest. In order to find the right accountant, who works to the highest standard and who is right for your business, it's obviously important to choose the right kind of accountant for the right accountancy job. The following is designed to help you do just that.

There are unregistered accountants not belonging to a professional organization. These increasingly take the form of online accountants offering online services exclusively. Business owners should not engage with such accountants without exercising a very high degree of caution and without conducting proper due diligence, if at all. It pays to find someone with the right qualifications, experience and proven track record. Additionally you'll need to determine what type of accounting service your business requires.

Are you struggling with your tax return? Looking for a pro-active accountant who'll help you make more profit and pay less tax? Starting out in business? Finding the answers to these questions will better enable you to make the right choice for your business. Are they cost effective while providing a high degree of value? This is another important consideration. As is finding out how much they value a close and hands-on working relationships with the businesses they work with and what their clients are saying about them. Doing so will pay dividends for your business.

To find how and also to learn more about the many ways having the right accountant can help your business visit us at http://colovaccountancy.com

We are specialised in small and medium size companies, contractors, freelancers and self-employees. We provide a full package of tailored made professional services to fit any of your business needs at extremely competitive rate. We are offering a real business support to companies and private clients and can be your true business partner.

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Sacramento Accounting

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