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4 Reasons Why You Should Hire a Tax Accountant for Small Business

Tax accountants do much more than only handle your tax return. They advise on legislation that could affect your business. They oversee and prepare your company’s tax compliance reports. And they give feedback about budgetary concerns. If you’re running a business without a tax accountant, you can probably already see why adding one to your firm is a good idea. Not convinced? Then check out these four reasons.

A Tax Accountant Can Be a Good Investment

You may be worried about the cost of hiring a tax accountant, but an accountant can actually save you money in the long run. Most tax accountants have a wide variety of accounting knowledge and skills, so your accountant could be the perfect fit for the other accountancy tasks of your company. By getting invaluable tax and general advice from an accountant, you are sure to see your profits grow more than they previously did. A tax accountant could be the best investment you make in your business. If you run a more significant company, it’s worth investing in hiring a certified public accountant. CPAs are qualified and highly experienced. So, they can assist in tax issues and a variety of other accounting elements like financial planning, mergers, acquisitions, and investments.

You Can Avoid the Nightmare of Doing Tax Returns

Tax accountants obviously deal with tax issues. So, if you’re unsure about your taxes, you should hire a professional. After all, doing your company’s tax returns can be an outright nightmare. You need to know what tax codes mean, which forms you need to fill out, how to fill out the complicated forms and a hundred other things. With so much time and stress focused on your tax return, you’ll probably also be worried about incurring hefty fines from getting your return in late. If you’re not an expert in tax, it’s best to hire a tax accountant. He or she will ensure you avoid any late-fines and put your paperwork in order.

A Tax Accountant Helps You Stay Legal

If you don’t fully understand your taxes, you could end up overlooking a critical detail which could result in a severe fine or even an illegal action. If you want to ensure you stay on the right side of the law, hire a tax accountant. He or she will be able to advise you on other legal matters too. There are a lot of rules and regulations for business owners, and understanding all of them can be tricky. For instance, you may not know that you legally need to take out employers’ liability insurance. Having an accountant as part of your team ensures your business meets all applicable rules and laws.

You’ll Have More Time to Focus on Other Things

However large or small your business is, you’ll know that it takes up a considerable amount of your time. On top of full-time working hours, you’ll probably be doing other tasks like maintaining your firm’s website, ordering stock, looking for new contracts, or looking over any other business fundamentals. Indeed, running a business can often mean you have little leisure time to spend with your family and friends. Taking time out is essential for any business owner, but with a seemingly never-ending list of tasks, how do you find that extra time? Of course, the answer is: get a tax accountant. Hiring an accountant to handle your taxes and organize your finances means there’s a huge chunk of your work-life that you suddenly don’t have to handle. Instead, you can focus more on other critical areas of your business and spend more time with your loved ones.

Guest Post: About the Author

Erika is an independent copywriter and content creator. She is an avid reader who appreciates unread books more than read ones. You can follow her on Twitter.

8 Proven Methods for Small Businesses to Save Money

Small businesses frequently go through cycles of strong and weak profits. When profits are low, you probably will want to find time-tested ways to save money. You do this by cutting costs and reducing your overhead without sacrificing sales. Here are 8 proven ways for your business to save money:

  1. Outsourcing:

    You can save money by outsourcing tasks that are not central to your business mission. This keeps your full-time staff as small as possible while outsourcing work not performed by staff. You can hire contractors and consultants as needed for specific tasks, often at a lower all-in rate than needed for an employee with the same skills.

  2. Advertising:

    You can continue to reach customers without traditional advertising. Rather, low-cost alternatives are available that will save you money. One alternative is to spend your marketing money on public relations rather than advertising. For example, a good PR strategy can get your company mentioned as authoritative sources in media outlets and publications. Inbound marketing using SEO and social media can be just as effective as conventional advertising in increasing traffic to your website.

  3. Vendors:

    Review your relationships with your vendors to see whether you can negotiate lower costs. Vendors want to keep their goods and services flowing to their customers and might be willing to charge less if that allows them to maintain their business volume. You can negotiate on a huge range of costs, from phone service to office supplies. The nice thing is that there is no penalty for trying to lower vendor prices, whereas forgone potential savings are the penalty for failing to negotiate.

  4. Cloud:

    If you don’t already live in the cloud, now is a great time to move in. Cloud-based solutions can save you big money compared to the cost of acquiring and operating your own expensive hardware. Cloud-based systems host your databases and software. SaaS (software as a service) costs an annual fee that can be much cheaper than developing or running your software in-house, such as payroll and ER systems.

  5. Telecommuting:

    Everyone can win when you embrace telecommuting if that’s possible for your business. You can save on office costs and ongoing operating expenses. Your employees save commuting costs and enjoy a better work experience. The result is to produce work products with minimal overhead. You can start with some of your office staff and work towards expanding telecommuting as convenient.

  6. Green:

    Happily, the moral imperative to go green coincides with cost-cutting. You’d be surprised how little things can add up to big savings. For instance, turn off machines when not in use, and use a printer that prints on both sides of the paper. Better yet, reduce your use of paper by adopting a paperless office concept. Where feasible, buy recycled supplies and equipment, utilize efficient lighting, and recycle your own waste for money.

  7. Debt:

    It might save you money to consolidate your various debts into one, convenient loan that charges a reasonable interest rate. If you have to make several debt payments per month, consolidation can cut it down to a single lender. If you choose a lender like IOU Financial, you can have your payments deducted daily from your bank account, keeping your payments affordable and automatic.

  8. Maintenance:

    Are you paying for daily cleaning services at your office? Perhaps you can cut back on this expense by training staff to keep things clean and neat. With proper staff training, you may be able to cut back to weekly cleaning without noticing the difference.

Conclusion

We’ve touched upon several ways for you to cut your business costs with little or no sacrifice to your operations. There are many more methods to save money, and we will no doubt return with additional suggestions in a later blog. Remember, it takes just a little extra effort to implement money-saving protocols that will continue to save money for your business over the long run.

6 Ways to Make Sense of Your Small Business Financial Statements

Running a small business usually means doing many different things simultaneously. As a solo entrepreneur, you are probably dealing with everything from sales to marketing, but the majority of business owners consider financial tasks to be the most difficult.

After all, this is exactly why only 50% of companies survive their fifth year in business. Financial statements are one of the features that particularly bother small-sized companies.

By definition, financial statements are written records that convey the business activities and the financial performance of a company. In other words, it is a document that clearly reveals the overall condition of your company.

Financial statements consist of three basic elements – balance sheets, income statements, and cash flow statements. However, it takes more than that to design a meaningful record of business activities. In this post, we are going to show you six ways to make sense of your small business financial statements.

Create an Accurate Income Statement

We already mentioned the three elements of a financial statement, so let’s open the list with the first component. We are talking about income statements, also known as the profit and loss statement.

This is a major feature because it reveals the profit gained and all of your expenses in a given timeframe. For instance, you could be creating a quarterly or annual income statement.

The income statement helps you and your clients to understand the nominal value of your small-sized business simply by comparing the revenue with the sum of expenses that took place in the same period.

Mind the Balance Sheet

Although very important, income statements cannot compare to balance sheets. The second item on our list is the real indicator of professional success, so you have to pay special attention to it. Bearing this in mind, it’s not a surprise to see clients and investors asking for this document in particular.

Unlike income statements, balance sheets reveal the current situation of your finances. The document applies to the specific date, thus showing the company’s situation in terms of liquidity and stability. A balance sheet should pinpoint three features:

  • Business assets: This includes everything your organization owns.
  • Liabilities: It reveals everything your organization owes.
  • Owner’s equity: This one allows you to see what’s left for the owner once you’ve nullified all of the liabilities.

Don’t Forget a Cash Flow Statement

The third component of a financial statement comes in the form of a cash flow statement. This is another very important feature because 60% of failed small and medium enterprises cite cash flow issues as the main reason.

For instance, your sales results might be flourishing, but you could still be struggling with delayed payments and the way cash flows into your business. In this case, you could be spending more money than you can afford due to the underperforming cash flow cycle.

You can analyze cash flow whenever you want and craft anything from annual do daily cash flow statements.

Make a Revenue Forecast

So far you’ve seen the essentials of creating a financial statement, but we must add three more elements to the equation. The first one is called a revenue forecast and it represents a critical report if you want to take a glimpse into the future of your small business.

To put it simply, the revenue forecast is the evaluation of the profit and loss in the next year or any other period in the future. If you make a realistic estimation, you can make additional plans related to marketing investments, sales strategies, operational costs such as salaries, and so on.

If you don’t want to enter the following year blindfolded, then making the revenue forecast is the only way to go.

Conduct an ROI Analysis

Too many small businesses are not able to calculate return on investments (ROI), especially in the field of sales and marketing. According to the report, only 50% of marketers believe their organization can correctly calculate ROI.

If you want to keep the business profitable in the long run, you have to be clever enough to measure performance on a regular basis.

The idea is simple – you just need to divide the outcome/benefit of your investment with the actual cost of the same investment. If you get in return more than you paid for in the first place, then you can consider the investment to be worthwhile.

Hire a Professional to Make Financial Statements

The last tip on our list is clear and direct – if you find the abovementioned tasks too difficult, then you should hire a professional to do it on your behalf. A lot of entrepreneurs hate to admit it, but the truth is they cannot handle financial reporting single-handedly.

If you are one of these small business owners, we strongly recommend you to stop experimenting and start taking things seriously. Hiring a professional accountant might cost you at first, but you won’t have to worry about possible mistakes that could have a devastating effect later on in your business.

Conclusion

Small-sized businesses are often struggling to get things done timely and efficiently. With too many duties and not too many workers, you can hardly find enough time to take care of financial statements and do it without making substantial errors in the process.

In this post, we discussed six ways to make sense of your small business financial statements. Can you do this job single-handedly? Do you have other useful tips to share with your peers? Feel free to write a comment – we would love to see your experiences with financial statements!

Guest Post: About the Author

Becky Holton is a journalist and a blogger at essay writing service australia. She is interested in education technologies,  assignment help and is always ready to support informative speaking at resume writing service. Follow her on Twitter.

Are You Ready for Your 2020 Budget?

You can’t put it off any longer. The time has arrived to prepare your 2020 budget that’s so necessary for important activities such as:

  • Projecting cash flows
  • Preparing for taxes
  • Identifying borrowing needs
  • Evaluating growth opportunities
  • Assessing performance

The stakes are high, because 50% of small businesses fail during their initial five years. You can increase your chances of success by budgeting your company’s income and expenses. Here are some suggestions to help you get started:

Review the previous budget:

Your 2019 budget contains a wealth of information. The most important is the line-by-line comparison between budgeted and actual expenses and income. This exercise should point you toward any significant adjustments to your 2020 budget.

Estimate your income:

You need a realistic picture of monthly income. If your company is brand new, speak with other small business owners to build a rough mental picture of your cash inflows. Don’t overestimate, as it encourages overspending, and don’t underestimate income, thereby inhibiting growth and expansion.

Estimate your expenses:

Start with fixed expenses, typically including rent, salaries, insurance, utilities, and taxes. Naturally, these can vary from one year to the next. Prudence suggests you pay about 30% of your income on estimated tax payments. You owe these on the 15th of April, June, September, and January. You don’t want to get dinged for underestimated tax payments.

Pay attention to unexpected items:

These may include vehicle maintenance and fuel costs, office supplies, shipping costs, meals and entertainment expenses, and professional dues/subscriptions. Also, allow for events like equipment breakdowns, rent increases, and other contingencies. Put aside a contingency fund so that surprises don’t blow your budget.

Consider capital expenditures:

You may be able to increase productivity by purchasing a new machine or system. The budget should include the amount of current cash inflows that must be allocated for these expenditures versus using funds from retained earnings. You may also want to use excess capital to pay down debt and thereby lower your interest expenses. On the other hand, you might want to borrow money to finance growth or to plug a gap in your budget. IOU Financial can provide you with a business loan of up to half a million dollars and get funding in as little as one day.

Concentrate on return on investment (ROI):

When you have multiple funding opportunities, choose the one with the highest ROI that exceeds the weighted average cost of capital. You can use internal ROI calculations to see which ones provide the most benefits. The same is true for marketing ROI, in which you direct your dollars toward different channels and media.

Create a review routine:

If you don’t already have one, set up a monthly budget review process that can allow you to make course corrections as soon as possible. For instance, if your fixed costs are higher than anticipated, you might have to cut variable expenses until you can find a way to lower your fixed costs.

IOU Financial offers our Business Budget Smart Sheet to help you get a grip on your business budget. With it, you have a sophisticated yet easy-to-use tool that will help you plan and analyze your cash flows. If your budget forecasts shortfalls in the next 12 months, turn to IOU Financial for a convenient business loan that can put money into your bank account quickly. In many ways, IOU Financial is an important resource to help your business succeed.

Secret Ingredients to Successfully Manage Your Business Finances

Managing finances requires constant vigilance. Many aspiring entrepreneurs are almost solely devoted to making the products they love or developing the big ideas they have come up with.

One of the biggest mistakes people make is thinking it’s all about the products and services they offer. With a mindset like that, an entrepreneur may feel like managing finances is a tedious chore.

Problems emerge when they start treating them as such. What your business has to offer will earn you a place in the market, true. But, if you want to survive there, proper finance management is vital.

Pay Yourself

Many passionate business owners tend to invest everything back into day-to-day operations. There’s no doubt that extra capital helps business growth. Still, that doesn’t mean you should sacrifice paying yourself to help your business thrive.

However, if the business doesn’t turn out as you would like, it’ll all be over with you hanging dry. You’re an employee just like everyone else, even if you are employing yourself. You need to compensate yourself just like you compensate others. Never forget that you’re part of the business in more ways than one.

Educate Yourself

Invest time in learning about different aspects of finance. If you don’t already know how, learn to read financial statements. You’ll know how to tell where the money is, how many hands it’s changed, and where it comes from. Financial statements have four key details – balance sheet, income statement, flow statement, and statement of shareholder’s equity.

The balance sheet relays information on shareholder’s equity, liabilities, and company assets. The cash flow statement analyzes financial inflow, financial outflow, operating activities, as well as investments.

The amount by which the business is funded through preferred and common shares is represented in the statement of shareholder’s equity. When you want to know how much revenue the business has earned within a specific timeframe, you can read the income statement.

Separate Business and Personal Finances

Your finances should be the line that separates business and pleasure. Get a business credit card and use it for its intended purposes. That way, you’ll stay in control and be able to track your outlays.

Opening a separate savings account would also be a wise step. You can use it to gradually build a corpus by transferring a certain percentage from each payment that you get. For instance, you can use those funds to pay taxes.

Drawing a line between the two signals responsibility and will improve your professional and personal image, especially among banks and investors. You’ll also keep the government happy. Such fiscal responsibility allows you to reap the benefits of various tax deductions.

Funding and Investment

If you want your company to thrive, it’s important to secure funds for growth opportunities. Investing a portion of your profits into other lucrative endeavours is one way of moving in a healthy financial direction, provided that you have the skills and knowledge to do that.

For instance, you can learn to trade and secure additional funds for your enterprise that way. Naturally, you’d want to make sure you learn all about the right strategies and risk management before you start. If you’re completely new to the game, make sure to start from the trading terminology and cover the basics, and then slowly make your way into the process.

If you know exactly how you’d invest money, you can always apply for a loan in order to secure the necessary funds for growth. Employees appreciate when their employer invests money into the company and therefore in their careers. If you don’t waste all of your profits on personal matters, you will ultimately create more value for your company.

Credit Score

The benefits of maintaining a good credit score are numerous. With a good credit score, lenders are more likely to offer you loans with lower interest rates and better terms, as well as enough capital to grow your startup.

A bad credit score, on the other hand, may make them avoid you like the plague. If a time comes when you need emergency funds, and there are many such surprises with businesses, you’d want to be on good terms with the banks.

So, even if you don’t need a loan now, that doesn’t mean you can allow yourself the luxury of having a bad credit score. To increase it, you can take out credit cards, use them regularly and pay them off even before they are due.

Conclusion

Being an entrepreneur means you have to work around the clock. There are always some issues that have to be dealt with immediately. No matter how busy you are, take some time every day to plan your finances for the future.

Guest Post: About the Author

Anna is a tech writer and researcher interested in startups, web development and business innovation. She is passionate about motivation, self-development and yoga. A recent hiking enthusiast, she enjoys exploring new trails and breathtaking views.

Business Credit Scores vs. Personal Credit Score

Starting a business takes money, and that money typically comes from financing. But in order to get approved for a business loan, entrepreneurs need to meet certain lending criteria, including having decent credit. Lenders will not only look at your personal credit score but also your business credit, both of which play a role in your ability to obtain financing for your business.

But how exactly does business credit and personal credit differ? Let’s dive into each to understand the difference.

Business Credit

Business credit – also referred to as commercial credit – helps lenders to determine your creditworthiness and candidacy for financing. A high business credit score can boost the odds of securing a business loan and obtaining better favorable terms. On the other hand, a low business credit score can make it more difficult to obtain financing and secure more favourable terms.

Not only do lenders look at our credit score, but so do vendors and suppliers before agreeing to deal with your company. Business credit is also required to obtain business insurance, and in many cases, it’s also needed for purchasing goods and services.

While your personal credit may be able to be used for some of these, in many cases it can’t. And even in cases where personal credit may be used, it really shouldn’t, as using personal accounts can make accounting a lot more confusing and difficult.

Who Creates Your Business Credit Score

There are three major credit bureaus in Canada that are responsible for determining business credit scores: TransUnion, Equifax, Dun & Bradstreet. Each of them uses a set of factors to determine a business credit score.

TransUnion

TransUnion offers both business credit reports and business credit scores. TransUnion uses business credit data and public record information to create their business risk score. This score takes into consideration a number of factors, including insolvencies or delinquencies, available credit limits, business bank accounts, credit cards, and collection.

Equifax

Equifax works a little differently than other credit bureaus in that it assigns a business three different scores. The first is a conventional credit risk score between 100 to 992, which assesses a company’s credit history. The second report from Equifax contains a “Payment Index” range from 0 to 100, which is a measure of payment history to past creditors. A score of at least 90 means that a business pay their bills on time, on average. Thirdly, Equifax’s “Business Failure Score” ranges from 1,000 to 1,880 and assesses the risk of businesses dissolving.

Dun & Bradstreet

The Dun & Bradstreet PAYDEX score is a rather straightforward business credit scoring model that’s based on how promptly payments are made and is scored up to 100. This credit score assesses the average number of days needed to pay off a debt. A score of 100 means that bills have been paid at least 30 days or more before they’re due, on average. Scores of 80 mean that bills are being paid the day they’re due, on average. Generally speaking, the longer it takes for you to pay your bills, the lower your score will be.

Personal Credit

Personal credit scores are used by lenders to assess a borrower’s creditworthiness and financial health. These scores represent numerical expressions that are based on an assessment of a person’s credit information.

Lenders use credit scores to assess whether or not consumers are able to qualify for a loan, the interest rate charged, and potentially even the loan amount. Missing bill payments and taking out too many loans can bring a credit score down, which can make it more difficult for a borrower to secure a loan.

A high credit score, on the other hand, means the individual has been much more responsible with his or her finances. Payments are typically made on time, credit limits are not maxed out, and debt loads are relatively healthy.

In Canada, personal credit scores range from 300 to 900. The closer the score is to the upper level, the better. Generally speaking, lenders like to see a score of at least 650 to 680 before they agree to extend a loan to an individual.

Who Creates Your Personal Credit Score?

In Canada, there are two major credit bureaus, Equifax and TransUnion. These bureaus compile the information found in your credit file to calculate your credit scores.

Certain factors are used to calculate a credit score, including:

  • Payment history – A history of timely payments will help increase your credit score, while a history of missing payments will do the opposite.
  • Debt load – The amount of debt you carry relative to your income will impact your credit score. Higher debt loads are often associated with lower credit scores, while lighter debt loads are typically associated with higher scores.
  • Credit utilization ratio – The amount of money that you spend relative to your credit limit will be a factor in your credit score calculation. It’s generally recommended to keep your spending to no more than 30% of your credit limit in order to keep your credit score healthy.
  • Age of your credit accounts – Older credit accounts are usually a good thing for credit scores, especially if they’re in good standing. Further, a longer credit history will help credit bureaus better assess your credit health.
  • Credit mix – Having a few different credit accounts – such as a mortgage, personal loan, car loan, and credit card – can be a good thing for your credit score, as long as you are responsible with all bill payments associated with each.

How to Establish Business Credit

In addition to keeping all of your business finances separate from your personal finances, there are other ways to establish business credit:

Open a separate business account – As already mentioned, mixing your personal and business finances can make things more cumbersome. Not only will a separate business checking account make things easier for bookkeeping purposes, but it can also help you build business credit when you use it strictly for business expenses.

Apply for a business credit card – Using a business credit card responsibly can help you build good credit, much like using a personal credit card responsibly can have the same effect. With each timely payment you make, your business credit can be improved.

Apply for a small loan – Every payment you make will be reported to the credit bureaus, which can help you build good credit.

Establish credit lines with suppliers and vendors – Since Dun & Bradstreet needs a minimum of four vendors to generate its credit report, it would help to establish credit lines with suppliers and vendors and build up relationships so they can eventually turn into future trade references for your business when you apply for a business loan.

Regularly keep tabs on your business credit – It doesn’t take long for your business credit to change, so it’s important to keep an eye on it on a regular basis. By identifying any changes in your business credit report, you’ll be able to spot any strange issues that you can deal with right away before they negatively impact your credit rating.

Should You Ever Mix Business and Personal Credit?

While we don’t recommend using your business credit card to pay for personal expenditures, your personal credit score plays a key role in your business. Having said that, lenders are still going to look at your personal credit score if your business is relatively new and will require a personal guarantee when applying for financing, which means you’re still responsible for the loan. If you ever default on your business loan, the lender has some more recourse aside from going after your business.

It’s important to still maintain your personal credit score while you’re building your business credit since they can both be important when applying for a business loan.

Guest Post: About the Author

Loans Canada is a financial technology and media company that connects Canadian consumers to financial service providers and educational resources. Loans Canada is one of the nation’s leading online destinations for information on loans, debt relief, credit building, and commercial financing. Their technology platform allows consumers to search for the best lenders and credit providers in Canada.

7 Tips for Boosting Your Tax Refund

The tax season is slowly kicking into gear. It’s a constant struggle to keep up with the legal changes, leaving many of us with missed opportunities, pondering just how much we could have gotten in tax refunds.

In this article, we aim to help you with a few simple tips. Each of them offers a glimpse into the current law, more like a lead you can use to further find out how you can benefit most from tax refunds this year. Interested? Keep reading. 

The Power of Tax Credits

Tax credits are often mentioned to be better than deductions themselves. This is because they subtract from your tax bill in a 1:1 ratio, and not in proportion to your rate. It’s a pure “dollar-for-dollar” deal.

There are several tax credits for which you can qualify as a business owner:

  1. Work Opportunity – a credit for employers who hire candidates facing significant employment obstacles, such as food stamp recipients or ex-felons;
  2. Disabled Access – similarly to the first one, a credit for employing candidates with disabilities;
  3. Qualified Research Activities – credit for resources spent on research and development – whether for a product, software, or a patent.

Look into the tax credit regulations to know which ones you are eligible for.

Prepay

If there are any fees that should be paid in January of the following year, try to pay them off by the end of December.

However, don’t get carried away in the race to pre-pay everything and run your account balance low. Look for smaller expenditures in membership fees, software subscription renewals, office space rental, warranties, etc.

Track Mileage

Whether you are an employer or an employee, track your commute to work. Over time, the mileage can add up to a significant tax deduction. There are two ways to go about it:

  • The Standard Deduction Rate – which covers the actual mileage (the IRS adjusts the rate each year, so make sure to stay informed), and
  • The Actual Expense – which covers everything else: gas, parking fees, insurance, etc.

According to a lot of firsthand online testimonials, many have found that the standard deduction rate works best for them. If you’re having trouble tracking mileage, there are smartphone apps that can help you get accurate tracking. Plus, it’s easier to turn it into a habit.

Stay in the Loop

When it comes to taxes, changes are being implemented every year. More so for businesses than for private households. It’s expected that most of it will be difficult to follow, especially when we’re busy.

Luckily, you can hire a tax expert to help you. Together with them, you can look over your current state, where the missed opportunities are, and how to fix any possible mistakes you’ve been making so far. It’s a great way to get a leg up on your finances and to make the taxes work for you, not against you.

Your 401K

“Investing” in your 401K or IRA (Individual Retirement Account), is a great way to ensure your future money is safe from taxation. It stays that way until you make your first withdrawals, which can be a few decades from now. Look into maxing out your contributions each year, and if the company you work for has a specific percentage for matching your investment, be sure to take advantage. 

If you are a business owner, your follow-ups to the employees’ contributions can also be written off as tax-deductibles. Just make sure to consult your tax expert beforehand, because the return value depends on the payment method.  

Employee incentives

We all know about the health and retirement plans, but there are also company picnics, gifts, bonuses, and even educational assistance. These can all be tax-deductible. Again, the best way to go about it is to visit the IRS webpage and check which ones are eligible for your business.

Write off Bad Debts

While many are already familiar with bad debts, it doesn’t hurt to remind: you can write off bad debts from clients that didn’t manage to pay you out. However, this comes with numerous caveats. It depends on how much time has passed for your request to be valid, and also on how well the business is doing financially. You’re more likely to get the debt written off if the company is near foreclosure and bankruptcy.

In the End

The secret to boosting your tax deductibles lies in your knowledge. Get informed as thoroughly as you can. A lot of the abovementioned tricks are known among experienced business owners and employees as well. If possible, hire an accountant or a tax expert for help. Look for advice among your peers, as firsthand accounts give great insight into what is possible and what isn’t.

Guest Post: About the Author

Michael Deane is one of the editors of Qeedle, a small business magazine. When not blogging (or working), he can usually be spotted on the track, doing his laps, or with his nose deep in the latest John Grisham.

Learn Valuable Skills Online to Better Serve Your Business

If you run a small business, you’re probably always looking for ways to improve quality and boost the bottom line. The good news is that you can learn many valuable skills online, often for free, that will help you achieve your business goals. These skills can help you improve your marketing and cut expenses for tasks that you now farm out to part-timers or consultants. The following is our list of skills for you to consider learning.

Marketing-Related Skills

  1. Copywriting:
    Does your website content show you off at your best? Do you feel your marketing emails are effective? If eigther answer is no, part of the problem might be weak copywriting. Poor grammar, inappropriate word choices, and boring copy self-sabotage your marketing efforts. While you can hire a good freelance writer at a reasonable rate, you might also want to improve your writing skills and take on some of the work yourself. You can improve your copywriting skills for free at websites like Copyblogger.
  2. Search Engine Optimization:
    SEO is a way to improve the results of online keyword searches. It involves several technical tasks as well as analyzing data from search engines like Google. Your goal is to get your company listed on Page 1 of search results for your chosen keywords (i.e., the terms a searcher might enter). While excellent, authoritative copy is a must, you can also boost your results by making it easier for the search engines to understand your website content. SEO does this, while data analytics shows how the public is responding. Check out the free online courses available from Google.
  3. Social Media:
    Nowadays, it’s almost mandatory to maintain a social media presence in order to compete effectively. Being a social media guru requires time, effort and skill. The payoff is improved buzz about your product or service, which can lead to higher sales. You can learn the ins and outs of social media at sites like Lynda.com. While some charge money, they often have a free trial period to test them out.
  4. Photography/Graphic Design:
    Beyond great content, your website and other marketing collateral should be visually compelling. Instead of buying the same old stock photos that everyone else uses, you can decorate your website with your own photographs and graphic designs. It could very well be worth your while to learn Photoshop, which will allow you to use your graphic skills to improve the look of your websites and other materials. Many sources of Photoshop training are available for free or a modest membership fee, such as Kelby One.

Other Skills

  1. Excel:
    Spreadsheets are almost mandatory for recording, tracking and presenting data. With them, you can do budgeting, track inventory, and a thousand other tasks. Excel is the most popular spreadsheet program, and you can get free training from Microsoft.
  2. Bookkeeping:
    You might be surprised how today’s powerful yet friendly bookkeeping software packages make bookkeeping an easy task that doesn’t require an accounting degree. Products like QuickBooks can handle your business bookkeeping as your business grows. You can get free training and certification from Intuit, the maker of QuickBooks, or from other free sources.
  3. Tax preparation:
    If your taxes aren’t too complicated, you can file them yourself using one of several tax preparation packages. For example, you can visit the Intuit website for free TurboTax training.
  4. Finance:
    If you have big ambitions in the business world, you just might want to become skilled at finance and financial decision-making. Many colleges and other institutions offer online courses that lead to certificates or degrees in finance. Also, check out the many finance-related articles offered at IOU Financial.

Conclusion

We’ve just scratched the surface about what you can do to beef up your business skills via free and paid online resources. Think about what would work best for your business and then get moving. You can bet your competitors are!

When a Loan Is the Right Move for Your Business

Every business needs adequate funding to survive and grow. Ideally, your operations provide enough cash flow to handle all your funding needs. But for many a small business, cash flow isn’t always enough to satisfy the need for working capital. That’s when it’s time to consider a business loan. Let’s look at a few scenarios in which a business loan is the prudent decision.

Purchasing Equipment

Your business may require expensive or specialized equipment. In addition, you may already own equipment that no longer provides the performance you require. If you feel you are losing sales or profit margin because you lack the right equipment, you owe your business the opportunity to compete using the most appropriate gear. Sometimes, equipment manufacturers or commercial suppliers will offer financing, sometimes not. A business loan used to finance much-needed equipment is a terrific idea.

Expansion

Your product or service is selling like hotcakes, and you know you could grow the business by expanding operations and/or enlarging your selling floor. If you need more or better space, it’s going to cost money. For example, you might benefit by making leasehold improvements to your brick-and-mortar store. Or you might want to open additional stores or move from your current location to something larger and more upscale. You are looking at a number of one-time costs, which is the type of challenge that a business loan can solve. The extra profits you earn through expansion will help you accelerate your loan repayment.

Unexpected Opportunities

It really hurts when a rare opportunity comes your way but you don’t have the capital to take advantage of it. For example, one of your suppliers might have cash flow problems that causes it to offer you inventory at a sharply marked-down price. You need money to purchase the inventory, and perhaps to pay for additional storage space. You know that this will pay off handsomely, so you arrange a business loan to grab the deal before someone else gets it. That’s a smart move.

Fresh Talent

Perhaps you run the type of business where the caliber of your top employees is critical to your success. If you’ve been the typical owner, you’ve had to wear many hats to launch your business and keep it running. You and your staff are overworked, and you can’t afford anyone to burn out, including yourself. In other words, you need to recruit some fresh talent because you know it will increase your revenues and/or reduce your expenses. A business loan can help pay for incentives to hire the right employees. Remember, if you don’t hire the person, your competitor might.

Acquisitions

If you’ve been successful running your business, it’s possible you’ve taken some market share away from the competition. Or perhaps you’ve been eyeing an operating business that complements your own. In many circumstances, a business merger/acquisition is the right way to go. It makes sense to fund an acquisition with debt if it will lead to increased market penetration, greater geographic scope, obtaining key assets, or expanding your business to related markets. You’ll need funding not only to buy the target company, but also to make changes to your own operations to accommodate your revised environment. You may need to increase your marketing budget or add management talent. A business loan is completely justified under these circumstances.

Seasonality

If your business suffers from uneven cash flows due to seasonality, a business loan can provide cash to help you withstand slow business periods. You should be able to repay your loan once the busy season returns. For example, you might need to furlough some employees, but want to continue to offer them health insurance. Or you want to buy inventory during the slow season because it’s cheapest then. Use a business loan to smooth out the seasonal revenue ebbs and flows that would otherwise threaten your company’s survival.

Conclusion

There are many circumstances that justify a loan for your small business. What is never justified is settling for a slow, overpriced loan. IOU Financial offers fast loans with convenient repayment options that won’t disrupt your operations. Our loan rates are extremely competitive, and we can say yes when banks say no. Contact us today to discuss how we can help you fund your business quickly and efficiently.

7 Ways to Avoid Financial Stress When Running a Business

Running your own business requires careful thought and planning. But even with all that, it’s hard to avoid feeling financially stressed from time to time. Handling the stress productively can help your business succeed. But avoiding it in the first place can also make your job far more enjoyable. Here are seven ways to sidestep financial stress before it appears:

  1. Establish good accounting habits:

    You can avoid much financial stress by knowing your exact financial condition every day and tracking your cash flows against your budget. You should purchase either a good accounting system in-house, subscribe to an online accounting package, or hire an accounting service to do your books. You should stay on top of your accounting entries and generate reports frequently to see where you stand. Using this information, you can respond to upcoming cash crunches early and take actions, such as delayed spending, to reduce the problem.

  2. Invoice promptly:

    Always invoice immediately when providing a service or sending goods. Encourage prompt payment with terms like 2/10 net 30. That is, you’ll grant them a 2% discount if they pay in 10 days, but in any event, the full amount is due in 30 days. After sending out invoices, remember to follow up promptly. You can automate your email and SMS service to help you maintain contact with the people who owe you money.

  3. Adopt money-saving ideas:

    For example, consider renting equipment rather than buying it. This can avoid an enormous outlay of cash that you can instead deploy elsewhere. Also, renting equipment relieves you of repair costs should it break down. You can rent office space, or better yet, work from home if possible. If you have staff, see if they are interested in working remotely, as this too can save you (and them) money. Put on your thinking cap and we’re sure you’ll discover dozens of smart ways to spend less money.

  4. Keep it legal:

    One temptation some business owners succumb to when finances get tough is to cut corners and adopt shady practices. Besides being unethical, it will surely elevate your stress level rather than reduce it, and in the long run can lend you in hot water. Keep it honest, and whether you succeed or fail, you’ll know you did so legitimately.

  5. Use an LLC:

    A limited liability company can reduce stress by protecting your personal assets from your business creditors. If you run a sole proprietorship, a creditor or legal opponent can sue you in court and if they win, seize your home, car and other assets to collect the money due them. An LLC shields you from personal liability for your business debts without having to set up a corporation.

  6. Do your own marketing:

    It’s become much easier to manage our own public relations, thanks to the internet and social media. You have the opportunity to effectively engage with people on a personal basis. Social media accounts are free, and you can do online advertising in any amount that is comfortable. Build up your website with good content to improve your position in web searches. Learn the ways of the SEO masters to help build website traffic, increase prospects and convert them to customers.

  7. Use debt wisely:

    Cash flows in a small business are often uneven. This is compounded by any seasonal aspects to your business. The wise use of debt can mitigate these problems by providing injections of cash when you need it. Moreover, a short-term loan can let you take advantage of opportunities that pop up from time to time. For example, you might have a supplier who offers you a great deal on inventory. A loan could allow you to buy up the extra inventory and then use the increased profits to easily repay the loan.

Conclusion

The key to reducing financial stress is to spend less, earn more, husband your cash and rely on credit when you need it. If you are interested in a low cost, convenient business loan, contact us at IOU Financial — we’d love to hear from you.