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Unclaimed Business Expenses.
| Posted on February 23, 2017 at 9:59 AM |
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It's unbelievable to hear that People forget to claim the expenses incurred on their Credit Card during their Tax Filing; We have noticed that many Business Owners neglect to include their Credit Card Activities, which qualify for Business Deductions. This is due to Ignorance and lack of knowledge in knowing how to input this in their Accounting Software. |
Top 10 Overlooked Tax Deductions.
| Posted on March 16, 2016 at 10:11 AM |
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Every Year, Business Owners across
the Nation sit down with their Tax Accountants to come up with as many Legal
Tax Deductions as possible. As a Business Owner, knowing which Business Tax
Deductions that you qualify for can help:
It is unfortunate that many Business Tax
Deductions are misunderstood and underutilized. Some Business Owners make the
mistake of claiming the wrong deductions or claiming the wrong amounts. Most
Business Owners overlook the most important Deductions that can help reduce
their Tax Liability. As you file your Taxes this Year, We have compiled the Top
10 Overlooked Tax Deductions that most Business Owners ignore during Tax
Period. Our Aim us to help you remember to claim these deductions as you file
your Taxes. 1.
Software: A Software Deduction is more than the traditional idea of
Software in a Box or Download. If you use any Cloud Based Tools such as Online
Accounting Software or Other Productivity Tools, your Subscription Fees are
deductible as well as these Software- as- a- service (SaaS)
options. 2.
Education:
Did you spend money to attend a
Trade Show, Industry Seminar, Training or Conference relating to your Business
or Career in the Past Year? Did you Buy Books, CDs or Online Tutorials related
to your Business? These Tools help you get smarter at running your Business and
are all Tax Deductible. 3.
Licensing
& Regulatory Fees: Do
you know that the Regulatory and License Fees that you pay each year to keep
your Business Operating and in Good Standing are Tax Deductible? 4.
Bad Debts: When a Client owes you money and they are not paying
their Bills, It is possible to deduct the Uncollectible Bad Debt from
your Taxable Income. 5.
Student
Loan Interest: Student Loan Interest is a Tax Deduction
that is commonly missed. If you have Student Loan Debt and you are
still paying for it- Either for yourself or for your Children, you have to
ensure that the Loan Interest is deducted for Tax Purposes .Note: The
Person who gets to deduct the Loan Interest is the person who is legally
obligated to pay back the Loan. This means that if the Loan is under your Name,
you can take the Tax Deduction; If the Loan is under your Adult Child's Name,
then your Child will be the one to claim the deduction on their Tax
Return. 6.
Medical
Costs: These include Health
Insurance Premiums, Dental Care, Glasses, Counselling, Therapy and Miles driven
to Medical Appointments. Weight- Loss Programs are also deductible if
undertaken as treatment for a Disease diagnosed by a Physician. 7.
Retirement
Plan Expenses: Whether you are a Solo Entrepreneur
or Business Owner with many Employees, Any Contribution (up to a certain limit
each year) made to a Qualified Tax-advantaged Retirement Plans such as SEP IRA,
SIMPLE IRA, 401(K) or Other Retirement Accounts are Deductible. It is important
to note that some People with IRAs miss the opportunity to contribute to their
Plan and don't realize that it's a deduction that does not need to be funded by
December 31st of the Tax Year. Tax Payers have until April 14th of every
following Year to fund their IRAs. 8.
Depreciation:
Depreciation can mean large Tax
Savings for most Business Owners and is usually complex enough to intimidate or
confuse many Business Owners. Certain Fixed Assets Purchases that you
buy for your Business cannot have the entire cost deducted in the same year
that you purchase it, instead you need to spread the cost across a few Tax Years
and deduct part of it each year. 9.
Business
Transportation (Vehicle Mileage & Maintenance) : Using your Personal Vehicle or Business Owned Vehicle
for Business Related Travel allows you to deduct the Value of
Depreciation on the Vehicle's Value by deducting your mileage with the IRS
standard mileage rate per mile of Business Travel, or ( If the Number is Greater)
by deducting the Total Value of Gas and Maintenance on the Vehicle. 10. Charitable Contributions & Non-Cash Charitable Donations:
The IRS likes to encourage and
reward People who donate and volunteer for charitable causes. Any Money that
you give to a Tax- Exempt Charitable Organization can be deducted from your Taxable
Income. You can also deduct certain out - of - pocket expenses incurred while volunteering
for a charitable organization. Deducting a Cash Contribution to a Charity is
easy, but too often People don't accurately value Non- Cash Contributions such
as Clothes. You will have to determine the fair market value. It is important to take note of these overlooked Tax Deductions and remember to list them during your Tax Filing. It has been reported that Most Business Owners give lots of extra money to the IRS due to lack of record keeping of these overlooked Deductions. This is why it is compulsory to keep accurate record of all your Expenses during the Year and have them categorized properly, so that you can reduce your Tax Liability to the minimum. We know that the Tax Filing Season is not fun and will like to take the stress off you, so that you can concentrate on building your Business, If you have not been keeping accurate records of your Income and Expenses, We are available to help you. Please Free to give us a Call on 202.422.4586. You will be glad you did. To your Business Success, Rosemary Anyanwu, CFE. Certified QuickBooks ProAdvisor, Professional Bookkeeper & Accountant. Rosyan Bookkeeping Services. |
Have You Reconciled Your Bank Statements?
| Posted on November 3, 2015 at 9:43 AM |
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Have you reconciled
your Bank Statements lately? Just a Reminder, We have only a few days left to
the end of the Year. Very Soon, It will be Tax Season and you will need to
submit your Financial Statements for Tax Filing. Can you confidently say that
your Company Accounts are updated and reconciled? It is very important to reconcile your Bank and Credit Card Statements at the end of every MONTH. A Bank Reconciliation is the balancing of a Company's Cash Account Balance to its Bank Account Balance. It is important to ensure that the Cash Account and Bank Account Balances match. The Main Document used for Bank Reconciliation is the Bank Statement. There are great benefits in reconciling your Accounts and we will be looking at a few of them today. These Benefits include:
I have listed a few of what I discovered in my years of
engaging Bank Reconciliations for my Clients. For easy assimilation, I will
categorize them as Internal and External Observations: INTERNAL OBSERVATIONS: 1) Pilfering Employees/Employees that steal from the Company. 2) Cash Registers not closed out. 3) Bank Deposits not being timely deposited by the Employees. 4) Cash Advances and Loans taken by Employees are not properly accounted for. 5) Unauthorized Purchases made on the Company's Credit Card. 6) Forged Checks being endorsed and cashed at the Bank. 7) Managers taking Clients to a strip club on the company's Credit Card (Yes, This Happens). 8) Rampant Starbucks purchases on the Company Credit Card. 9) Wrong Recording and Classification of Loan Accounts, Line of Credits and credit Card Accounts. EXTERNAL OBSERVATIONS : 1) Customers reversing charges, without the knowledge of the Business Owner. 2) Automatic Payments increase by the Bank. 3) Utility Companies like Telephone/Internet Companies billing Clients twice in the same month. 4) Fraudulent Purchases on the Company Credit Card. 5) Match.Com Payments made on the company Credit Card. 6) Unauthorized Withdrawals by the Banks ( Inadvertently claiming the Business Owner authorized it). 7) Bill Payments issued via Bill Pay were not mailed out by the Bank to the vendor issued, hence the business Owner incurs late charges for Non Payment of Bills. 8) Over $3,500 in Annual Bank Fees for Overdrafts/NSF/Late Fees. We can see that most of these items are charge worthy and I have seen a lot of Business Owners experience One or more of these errors because they don't reconcile their Statements. We need to have internal and external procedures in place to get our accounts reconciled. If you have not been recording your transactions from the beginning of the year and have not reconciled them, the best time to start is NOW. Please do not feel that it is a waste of time to reconcile your accounts, you never know, you may have been losing a lot of cash under your nose. Try to take a look at your account today and begin to experience increased Cash flow. If you feel that you don't have time to get to your Bank Reconciliation, Feel Free to Give Us a Call on 202.422.4586. We are always available to help you. |
How to Avoid Online Fraud.
| Posted on May 18, 2015 at 11:32 AM |
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The Warmer
Weather has finally arrived; soon it will be summer. Most Business Owners let
down their guard, let go on Vacations and have Fun. Coincidentally, it's
also a time that Online Scammers and Hackers get active and keep their
eyes looking for Accounts to hack and tamper the unfortunate company Account
Holders. Our Discussion today focuses on an area that is passionate to my heart. As a matter of fact, I look forward to a day, that every company will be devoid of fraud. Technology has given fraudsters an edge in recent years, and we see a lot of fraudulent activities and online attacks on most Business Account. There are majority of fraudsters out there that are using the basic scams to de-fraud merchants, because there are too many Businesses that are not doing anything to stop them. The Purpose of this Write-up is to provide information on the various types of Account Frauds that exist and how to prevent these online fraudulent attacks on your Business. The Online Frauds are as follows: 1) Morphing Fraud (Repeat Offenders): This is common in online customer sales businesses. The Fraudster hits a Single Merchant, multiple times using slightly different data points each time; A Multiple Purchase is made from your Business site within a short time frame with a number of different credit cards. In this Case, All of the Goods will be going to the same location, but all of the other data may change between purchases. 2) Skimming:This is where the Debit/Credit Card Numbers are being accessed in common places like Restaurants, Bars, Hotels, ATMs and Airports. The Fraudsters place fake devices in these locations or sites, where an accomplice or entire staff unknowingly swipes each credit card that is entered. Afterwards, these Numbers are collected and sold. 3) Debit Card Fraud: This occurs when a criminal gains access to your debit card number, to make unauthorized purchases and/or withdraws from your Account. When your Debit Card is used fraudulently, the money is missing from your account instantly. Recently, We had a case of client, whose Company Account was continuously charged an unauthorized amount for 6 months, and the Client innocently thought the charges were for services, he had signed up for, until his account was reviewed and he found out that they were fraudulent online transactions. 4) Identity Fraud: A Case of Identity Theft is being reported every 19 Seconds since the Year 2001; It occurs when someone's personal information is stolen and a credit card account is opened in the victim's name, without their permission , and charges are made to these account. It is worthy to note that identity fraud does not necessarily occur, when a credit card is simply stolen. Having looked at the most common types of Online Fraud, We have listed below the steps to prevent your account from being attacked. Avoiding Online Fraud:
Finally, it is
worthy to note that the most effective way to prevent fraud is to be proactive
in the design of your strategy. It is really scary to consider the
damages. What Strategy have you put in Place to prevent your Personal and Business Account from being attacked? Think about this and Act Immediately. If you need help with setting up a Fraud Resistance Accounting and Bookkeeping Strategy, we are just a Call away. We would love to hear from you. |
5 Strategies Of Turning your Profits into "Cash"
| Posted on December 8, 2014 at 2:29 PM |
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The Holidays are here and it's time to ensure that we have some cash tucked
somewhere for the Holiday Shopping, Gifts, Christmas Parties, as well as
Year-end Savings.
In our last Newsletter, we uncovered the myth of profits, and learnt that,
understanding how transactions occur in our business and its effect on our
financial statement is key to managing our profits. Please feel free to
refer to our last newsletter for the full details. This Month, We will be
looking at 5 strategies of turning our Profits
into "Cash": 1 ) Cash is King: Every company experiences an increase or decrease in
Cash availability at any given period; the basic key to turning your profit
into "Cash" is what you do, when you have made a Great Sale and
received Payments from a Business Windfall. This should be the period
to have a Savings or Cash reserve Account, whereby you can set aside a certain
percentage of this revenue and discipline yourself, not to meddle with the
account. This is called effective Cash Management, and it takes a lot of
discipline, but if taken seriously, you will achieve great results. 2) Plug your Cash Leaks: A lot of Business Owners are surprised about
the waste, inefficiency and unchecked spending of precious Cash that should
have remained in their Bank Account, if they have been managed
effectively. As a Business Owner, it's possible to have been a culprit of
any of these acts:
It's time to take a forensic trip down your Profit & Loss
Statement and try to justify every expense line item, I assure ,you there
will be a 5 % more profit ,just waiting to find its way to your bottom
line. 3) Take Ownership of your Business Account: A lot of Business owners
tend to mingle their personal expenses with their Business Account. Once you
indulge in this practice, your financial reports are contaminated and become
pretty worthless, especially when it comes to decision making. It's better
to take ownership of your Business Account and maintain it, as a separate
"entity" from your personal account. This will help you manage
your cash flow better, and hence you will able to pay yourself
appropriately. After all, this is the reward of being a savvy
business owner. 4) Avoid taking on too much Debt: Too much debt sucks the financial life
out of a company. In our last Newsletter, we learnt how Principal Loan payments
occur on the Balance Sheet and are funded by your profit; Imagine what happens
when your company is overburdened with debt, Chances are that you will use your
Cash flow to continually offset the debts, and this causes your company to be
cash starved.
The only way to eliminate debt is to put yourself and your company on
a "strict debt reduction diet". If
possible, Stop adding further debt to your company; otherwise have a
strategy on how to pay off the debt, if you MUST take on further debts. 5) Have a Budget: A Budget is a blue print of an
estimation of revenues and expenses for a given period in the future. A Budget
gives financial direction. A Budget keeps you on track and helps you
to manage your cash flow. Preparing a Budget makes you disciplined and faithful
to keeping your profits. This is the best time to prepare
a Budget for your Business towards the upcoming year.
As we approach the New Year, Why don't you try out these practices and
watch your Cash flow grow. You will be surprised at how a few dollars will
add up in your Bank Account.
Do you need help with creating your Budget for the upcoming year? Are you
experiencing problems with recognizing your expense line items and
don't understand how your Cash flow operates? Why don't you give us a
Call, We will be glad to help you out.
Happy Holidays. |
Where did my Profit go?
| Posted on November 5, 2014 at 1:44 AM |
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-Understanding the Myth of Profits. As a Business Owner, Have you ever wondered why you cannot seem to get hold of your profit? Most Business Owners ask the question....." I see that I made a Net Profit of $XXX, but where is it? ".We have been looking at the topic of profit making, and this topic is a great mystery in Businesses. We agree that making Profit is a good thing and a negative profit (Loss) is not a good one; however, the mind game begins when there is profit, but no money in the Checking account. Do you also wonder why you don't go out of Business, when your Profit & Loss Statement keeps showing a negative profit (Loss)? The Answer is simple: PROFIT IS NOT CASH. The most important fact to remember about Profit is that, Profit has no connection to how much Cash is in the bank. A Profit and Loss Statement shows the movement of transactions, which occur in your Business for any given period (monthly), and the total net effect of these transactions constitute the balance that you see on your reports. An Example is when you enter a Business transaction, and an invoice amount of $3,000 is created in your Books, your Profit and Loss Statement shows the Sale and Resulting Net Profit, but there is NO CASH, until the invoice is paid; this money remains in your Account, only for a period of time, because when you pay your vendors or make your Bill Payments/Loan Payments, the money is being used up. Let's take a Loan Payment as another example; Most Business Owners forget that only the interest portion of a Loan Payment appears on a Profit & Loss Statement, while the Principal portion of the transaction occurs on the Balance Sheet. In this case, another portion of profit has been used to pay the principal. In conclusion, It's not Magic...........It's just having a basic understanding of how transactions occur in your Business and its effect on your Profit & Loss Statement, as well as your Balance Sheet. The Ultimate Goal is to make better financial decisions. However, take Note, You can be profitable and still be broke (Did I hear someone scream?). Turning Profit into Cash is the secret to managing your Net Profit Balances. Our Next Newsletter will feature, how you can turn your Profits into Cash; if you need help with understanding your financial reports, why don't you give us a call? We would be glad to help you. |
What do you expect your Profit to be this Year?
| Posted on October 7, 2014 at 1:17 AM |
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Profitability is a key driver of financial success in business. The goal of every Business owner should be to make profit and improve their business to make it better. If you were having a discussion, one year from today, and looking over your financials, Will you be happy with your financial progress? This question should propel you to take action, about what you expect your profit to be for the year. Profit is like a car,that must be driven; it does not drive itself; for you to get a projected profit, you have to be on top of your profit expectations. I have listed some questions, which should stimulate you to focus on an expected profit, as the year is coming to an end:
As you go through these questions, you're painting a picture of what your financial success should look like, and this will lead you to action, for an end result. Having a picture requires taking action to actualize your projected expectations. These steps below will help you achieve your financial profit picture, feel free to put them into practice and see the transformation, it brings to your business: 1) Have a Target Goal: You need to have a financial goal for your business at the beginning of every year. The Goal can be broken into monthly, quarterly and semi-annual financial targets. It is advisable and easier to have a monthly target. 2) Monitor your Progress: Once you set your financial goals, you will need to monitor your progress, against your target every month. You can only monitor your progress by examining your monthly financial reports (Profit & Loss/ Balance Sheet Reports). If you have not been preparing your report, this should be a good time to start. 3) Adjust: At the end of every month, you need to review your target goal against your actual results (financial reports), and decide if you need to make changes, in your business, to achieve your targets. The changes can be in form of reducing an expense category to putting a plan in place for faster accounts receivables process. This is the secret to creating your financial success for your business. I challenge you to put these into action and watch your business achieve your desired projected profit. Do you need help with interpreting your financial reports? Perhaps you are yet to prepare your financial reports for the year, and don't have an idea of your actual profit; Call us NOW for further consultation and Assistance. We will be glad to help you. |
Setting up the Right Accounting System for your Business.
| Posted on September 5, 2014 at 12:50 AM |
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Setting up the Right Accounting System for your Business. Every
Business needs a good Business Accounting System to increase their
Business' chance for success. When Starting a Business, the first focus should
be on building systems and processes, that allow us to accurately capture
as much data as possible, from the setup process; It is important to remember
that this process helps us to learn about our businesses and enhances our
decision making, as well as giving us a better idea, of what is going on in our
Business. This Month, we will be looking at the processes of setting up the right business accounting system for our Organization. Below are some points to consider, when setting up your Business Accounting System:
You need to spend time in setting up the
right Accounting system for your Business, if you want your Business,
to be successful. We know that it is easy to get caught up in all the
administrative tasks and will suggest that you ask for help Do you have the right Accounting System for your Business? It's not too late to set up a good system for you, why don't you give us a Call to help you out. Remember: You are increasing your Business chance for Success, when you make your Account Setup, a priority. |
Tips for Managing Your Business Cash Flow.
| Posted on August 5, 2014 at 2:49 AM |
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It's already
the eighth month of the Year, We are gradually getting to the end of the year,
and soon it will be time for Year End Reports. In our last Newsletter, We
discussed the concept of Cash Flow and how it affects our Business Operations;
this month, we will be looking at tips to manage our Business Cash Flow. Being in Business for yourself is like being an Air traffic controller, especially in the area of cash flow management ; You can imagine trying to control 100 Airplanes landing simultaneously on two runways; this can be an upheaval task, but we regularly see clients line up their monthly bills, their projected income, business projects and business expenses and try to combine all these activities, at the same time, trying to ensure a steady cash flow into the business; you can imagine, the projected outcome, if all these activities are not properly coordinated. Cash Flow is the heartbeat of every Business, and if a Business does not have the cash on hand to pay their vendors, they will definitely run into problems. The main Cash Flow Problem, that Business Owners face is as a result of Lack of Creative Cash Management. Below are some Tips to overcome the Ups and Downs of Cash Flow Problems in your Businesses: 1) Always Schedule All Payments: Most Business Owners line up their monthly bills, compile them, sit down and issue all the checks and set up Bill Payments at once; but the trick is to have a " Holding Pattern". It is advisable to schedule each payment, in order to get to your vendors in a timely landing, without affecting other Cash Flow activities. Every Business has Three (3) tiers of Checks Disbursements Groupings: a) Must Pay Group- These are payments that can hurt you, either in cost or ability to operate your business, if they are not paid. These include items like Taxes, Rents, Payroll and Service Charges. b) Important to Pay Group - These are payments, that have a reasonable grace period, and if not paid, a financial penalty can be incurred, as a result of Nonpayment. These include Utility Bills , Credit Card Payments and Insurance Payments . c) Flexible Payment Plan Group - Suppliers, Vendors and Wholesalers, that supply most Small Businesses are the best sources of flexible credit financing. Most of them will continue to work with you, if you arrange a regular payment plan with them.
2) Make
Payments on your Revenue, not on uncollected Sales : I am sure, that none
of us will want to land a plane, hoping that the runway is beneath us in the
fog bank, as also Business owners, it is not advisable to make projected
payments on uncollected revenue. You may wander, what happens to Credit
Facilities, Guess What, Most Credit Facilities still have a timeline for
payment.
3) Do
not use Payroll Taxes to float your Business Operations: Studies
have shown that most Business Owners use the Tax liabilities, collected
during payroll, to float their businesses, rather than remitting the payments
to the appropriate Tax Authorities. They don't realize that they spend
more in potential penalties, fees , interests, time and aggravation, if they
engage in this act. Tax Liabilities grow, if they are not remitted at the
appropriate timing.
4)
Establish Relationships with your Credit Provider: It is very important
for every business owner to plan for a rainy day. Having a great relationship
with a vendor, that gives you a credit facility, avoids cash flow
storms, which might bring in a sense of desperation or lack of control.
5)
Invest in a Good Bookkeeping/ Accounting Service: It is important for
Business Owners to have a grasp of their cash flow and understand the
effect on their business growth. A Good Bookkeeping service is invaluable to
your business, particularly in preparing your monthly financial reports and
cash flow statements, which will help you, see how your Business is doing as
well as maintaining your Business Cash flow.
Please feel free to contact us on 202-422-4586, if you will need further help on how to manage your Business Cash flow and financial Reports. We will love to help you. Remember: The best time to take control of your Cash Flow is RIGHT NOW. |
Understanding Your Cashflow
| Posted on July 2, 2014 at 1:55 AM |
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Welcome to the
month of July. We are done with the first half of the year and started the countdown to the remaining half of the year. Our Newsletter for
this month is on an integral part of every business; an area that is generally
misunderstood by most business owners, but interestingly plays an important
role in every organization. Have you taken time to look at your Cash flow
Statement? Can you tell where Funds are disbursed in your Business? Do you
understand the effect of your Spendings? The art of struggling to understand
and manage your cash flow can be a huge distraction to your business; in this series,
we will be providing you with quick tips on the basic method of understanding
your cash flow. Our Areas of
Concentration will be on: - Definition of
Cash Flow - Drivers of
Cash Flow in a Business - Facts about Cash
Flow - Quick Tips on
Understanding your Cash flow and applying it to your Business. - Managing your
Cash Flow effectively. What is Cash Flow? Cash Flowis the movement of money into or out of a business, project or
financial product, and can be measured at any specified period of time. The Following
are the drivers of Cash flow in a Business:
It is worthy to
note that your Cash Flow originates from 3 Basic Operations: a) Cash Flow
from Operations b) Cash Flow
from Investing c) Cash flow
from Financing Most Business
Owners have problems with Understanding their Cash Flow because of the
following facts: a) A Profit or
Loss in a Business does not equal Cash Flow. b) An Increase
in Cash in your Business is not always good. c) A Decrease in
Cash is not always bad. Many Business
Owners have problems understanding and interpreting their Cash flow, because of
the technicalities involved; but I want to challenge you today, to take the
simple test below, write down your answers and put it into practice, and watch
your business grow; I bet you will be so thankful for this
enlightenment:
By
doing this exercise periodically, you will have a better grasp of your cash
flow, and see its effect on your Business growth. I will like you to
try this exercise and forward your feedbacks. In my next article, I will be
giving you tips on how to effectively manage your Cash flow in your Business.
Please feel free to contact us, if you will need further help in understanding
your Cash flow and producing your Cash Flow Report. We will love to help you. Remember: The
best time to take control of your Cash Flow is RIGHT NOW. |