As a business owner you have more important things to do than to run your own accounting department. We take care of all accounting, bookkeeping, general excise tax reporting, payroll needs and tax preparation for you, so you can get back to the job of running your business and generating profits!
Each month or quarter we’ll do the following things for you…
- Reconcile your bank account and credit card account
- Generate an income statement
- Generate a balance sheet
- Clean up your general ledger
- Provide consultations
These tasks form the solid foundation of your small business accounting system. You can customize the package of services you receive by adding payroll, tax planning, tax preparation, or any of our other services.
Reconciling your business checking account each month allow us to keep your bank account, accounting, and taxes up-to-date.
Having us reconcile your account each month allows you to…
- Identify lost checks, lost deposits and unauthorized wire transactions.
- Detect and prevent excess/unjustified bank charges and ensures transactions are posted correctly by your bank.
- Detect and prevent embezzlement of funds from within your company.
- Know how your business is doing? You can’t really know unless all accounts are reconciled and properly accounted for on your financial statement.
- Manage your cash more effectively. Proper management of funds not only saves money, it makes money for you.
- Protect yourself. By timely reconciling and promptly objecting to your bank about any unauthorized, fraudulent or forged checks presented to your bank and paid by that bank, you can relieve your agency of responsibility for the shortfall and transfer the risk to the bank. This reason to reconcile alone should be enough. Crime exists.
- Sleep Better. You will sleep more peacefully at night knowing your bank accounts are reconciled, in balance and that all escrow funds, accounts, checks and disbursed funds are properly accounted for.
- Credit card accounts are also reconciled when you pay for business expenses on your business credit card.
An income statement, otherwise known as a profit and loss statement, basically adds an itemized list of all your revenues and subtracts an itemized list of all your expenses to come up with a profit or loss for the period.
An income statement allows you to…
- Track revenues and expenses so that you can determine the operating performance of your business.
- Determine what areas of your business are over-budget or under-budget.
- Identify specific items that are causing unexpected expenditures. Like phone, fax, mail, or supply expenses.
- Track dramatic increases in product returns or cost of goods sold as a percentage of sales.
- Determine your income tax liability.
Balance Sheet – A balance sheet gives you a snapshot of your business’ financial condition at a specific moment in time.
A balance sheet helps you…
- Quickly get a handle on the financial strength and capabilities of your business.
- Identify and analyze trends, particularly in the area of receivables and payables. For example, if your receivables cycle is lengthening, maybe you can collect your receivables more aggressively.
- Determine if your business is in a position to expand.
- Determine if your business can easily handle the normal financial ebbs and flows of revenues and expenses?
- Determine if you need to take immediate steps to bolster cash reserves?
- Determine if your business has been slowing down payables to forestall an inevitable cash shortage?
Balance sheets, along with income statements, are the most basic elements in providing financial reporting to potential lenders such as banks, investors, and vendors who are considering how much credit to grant you.
Maintaining a Clean General Ledger
The general ledger is the core of your company’s financial records. These records constitute the central “books” of your system. Since every transaction flows through the general ledger, a problem with your general ledger throws off all your books.
Having us review your general ledger system each month allows us to hunt down any discrepancies such as double billings or any unrecorded payments. Then we’ll fix the discrepancies so your books are always accurate and kept in tip top shape.
Consultations – We are always available to spend time with you so you fully understand how to interpret and utilize the financial information we provide. Our consultations are already included in our pricing structure, so please feel free to call us whenever you have a question or concern.
Free Consultation on our Business Accounting Services, please call or email us (email@example.com) between 9 a.m. to 5 p.m. Monday through Friday.
Our Flat Fee Payroll Services run every other week, monthly or twice per month, and prices may be obtained based upon the number of employees your business has. It features Direct Deposit for the convenience and safety of all and includes all of the monthly, quarterly and year end payroll filings, along with W2s for your employees. There are no hidden fees!
Additional Services – Your Custom Request is what we want to achieve for you!
Re-Shopping Line Items – often our clients don’t have the time to reduce costs. We can target areas for improvement and help you get it under control.
We also provide Human Resources help: New Hire setup & verification forms, provision of templates for Employee Reviews and Rate Changes to Employee Compensation, etc.
Safety in the Workplace: Safety Handbooks & Checklists can be written for your company. When safety procedures are written and signed off on by supervising employees, and diligent on site safety records are completed, the results can be astoundingly significant when negotiating your new, lower, Workman’s Compensation rates.
Confidentiality is provided at all times and our secure server stores your company files securely.
Office Hours: Monday – Friday 9am to 5pm
Big Island Accounting Services, LLC
73-5618 Maiau St, B104
Kailua-Kona, HI 96740
Phone: (808) 331-1234
Toll Free Fax: (866) 252-0908
10 Reasons Why You Should Use QuickBooks
QuickBooks is the ideal business accounting software for small to mid-sized business owners. Here’s 10 reasons why you should be using QuickBooks.
- You save time on bookkeeping and paperwork because many of simple bookkeeping tasks are handled automatically making it easier to run your business.
- You can easily generate the reports with the information you need, so you always know where your business stands. You instantly know whether you’re making money and whether your business is healthy.
- You save money because QuickBooks is so affordable. You can use it to run a $5 million or a $25 million business for a few hundred bucks. PC accounting software is truly one of the great bargains in business.
- Your business can grow with QuickBooks. QuickBooks will help you design a business plan to use when trying to secure a small business loan or line of credit or to plan for the future. QuickBooks will create a projected balance sheet, profit and loss statement and statement of cash flows in the format recommended by the U.S. Small Business Administration.
- You can customize QuickBooks to work the way you want. QuickBooks is specifically designed to be flexible and adaptable to a wide range of small businesses. To broaden its appeal, QuickBooks has recently added customized accounting packages for Contractors, Retailers, Health Care Professionals, and Non-Profit organizations.
- You can rest assured knowing that QuickBooks is a stable, reliable and proven product. Hundreds of thousands of small businesses throughout the world have chosen QuickBooks as their accounting software. You can’t go wrong with a software program with such an extensive installed user base.
- You save typing time and errors by sharing data between QuickBooks and over 100 business applications. You can even share data with popular programs, such as Microsoft Excel, Word, Outlook and ACT.
- You will get paid faster with QuickBooks online payments. E-mail an invoice or statement and with QuickBooks Online Billing, your customer can easily pay you with a credit card or bank account transfer. No more waiting for the check in the mail!
- You can easily accept Credit Cards. With QuickBooks Merchant Account Service, you can accept credit cards with ease. QuickBooks Merchant Account Service is the only credit card acceptance service integrated with QuickBooks software, which means you don’t have to enter the same data twice. No additional software or hardware is required. Your customers can use Visa, MasterCard, or American Express.
- You can pay your bills and bank online. Setup your current bank account in QuickBooks, and you’re ready to pay your bills without licking envelopes, sticking stamps, or printing paper checks. Just write checks in QuickBooks as you normally would, then click a button and your participating bank does the rest! Pay anyone in the U.S. from your credit card companies to your pizza service. Online Banking also lets you download your monthly statement from your participating bank directly into QuickBooks for easier reconciliation.
Tax planning is a process of looking at various tax options in order to determine when, whether, and how to conduct business and personal transactions so that taxes are eliminated or considerably reduced.
Many small business owners ignore tax planning, and don’t even think about their taxes until they’re scheduled to meet with their accountant; but tax planning is an ongoing process, and good tax advice is a very valuable commodity. You should review your income and expenses monthly, and meet with your CPA or tax advisor quarterly to analyze how you can take full advantage of the provisions, credits and deductions that are legally available to you.
Although tax avoidance planning is legal, tax evasion – the reduction of tax through deceit, subterfuge, or concealment – is not. Frequently what sets tax evasion apart from tax avoidance is the IRS’s finding that there was some fraudulent intent on the part of the business owner. The following are four areas most commonly focused on by IRS examiners as pointing to possible fraud:
1. A failure to report substantial amounts of income, such as a shareholder’s failure to report dividends, or a store owner’s failure to report a portion of the daily business receipts.
2. A claim for fictitious or improper deductions on a return, such as a sales representative’s substantial overstatement of travel expenses, or a taxpayer’s claim of a large deduction for charitable contributions when no verification exists.
3. Accounting irregularities, such as a business’s failure to keep adequate records, or a discrepancy between amounts reported on a corporation’s return and amounts reported on its financial statements.
4. Improper allocation of income to a related taxpayer who is in a lower tax bracket, such as where a corporation makes distributions to the controlling shareholder’s children.
Tax Planning Strategies
There are countless tax planning strategies available to a small business owner. Some are aimed at the owner’s individual tax situation, and some at the business itself. But regardless of how simple or how complex a tax strategy is, it will be based on structuring the strategy to accomplish one or more of these often overlapping goals:
- Reducing the amount of taxable income
- Lowering your tax rate
- Controlling the time when the tax must be paid
- Claiming any available tax credits
- Controlling the effects of the Alternative Minimum Tax
- Avoiding the most common tax planning mistakes
In order to plan effectively, you’ll need to estimate your personal and business income for the next few years. This is necessary because many tax planning strategies will save tax dollars at one income level, but will create a larger tax bill at other income levels. You will want to avoid having the “right” tax plan made “wrong” by erroneous income projections. Once you know what your approximate income will be, you can take the next step: estimating your tax bracket.
The effort to come up with crystal-ball estimates may be difficult and by its nature will be inexact. On the other hand, you should already be projecting your sales revenues, income, and cash flow for general business planning purposes. The better your estimates, the better the odds that your tax planning efforts will succeed.
Hidden within the labyrinthine course known as the Internal Revenue Code are valuable money-saving strategies overlooked or undiscovered by many business owners. At the same time there are misleading passages that have been the cause of millions of dollars mistakenly paid to the IRS. Dollars that should have remained in business owner’s pocket.
Alternative Ways to Save on Business Income Taxes
Maximizing Business Entertainment Expenses
Another interesting way to save on your taxes, that can be fun as well as rewarding to you and your business, is to deduct entertainment expenses. Entertainment expenses are great deductions to add to your taxes and can save you money; however there are some important guidelines to consider when including them on your return.
In order to qualify, business must be discussed before, during, or after any meal to be considered a deduction. The surroundings must be conducive to business discussion. For instance, a small or quiet restaurant would be an ideal location for a business dinner. Be careful of locations that include ongoing floor shows or other distracting events that inhibit business discussions. Prime distractions are theater locations, ski trips, golf courses, sports events, and hunting trips.
Starting in 1994, the IRS allows up to a 50% deduction on entertainment expenses. Good documentation of these expenses is required in order for the IRS to consider these deductions. Remember that the business meal must be arranged with the purpose of conducting specific business. Bon appetite!
Important Business Automobile Deductions
An automobile is quite an expense, especially for those of you who own more than one.
Beginning on Jan. 1, 2015, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 57.5 cents per mile for business miles
- 23 cents per mile for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
- 24 cents per mile for depreciation component
Another common way to increase deductions is to include both cars (if you own more than one car) in your deductions. This is possible since the business miles driven determine business use. To figure business use, divide the business miles driven by the total miles driven. You can do this for each car driven for the business and can bring significant deductions.
This is simply a wonderful way to save, but remember: in order to be effective, a consistent mileage log should be kept. Consider meeting with a professional to determine the most efficient way of tracking mileage and other costs. Happy driving!