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Are You Overpaying Your Business Expenses?

Running a small business is a costly undertaking in terms of time, effort and money. Unfortunately, too many businesses spend too much on their expenses. This eats into your working capital unnecessarily, possibly crimping your flexibility and your ability to take advantage of opportunities as they appear. Let’s look at some expenses for which many owners overpay.

Credit card processing:

As your business grows, so does your credit card volume. Have you asked for a quantity discount on your credit card processing fees? This is an extremely competitive market — shop around and you might find much better deals.

Design instead of content:

Your website is a tremendous lead generator. A problem surfaces when owners lavish too much money on design without paying enough attention to content. Your search results will improve if you populate your website with timely, authoritative content. While fancy design is fine, it won’t improve your Page Rank, and it can be expensive to create and maintain. Spend that money instead on quality writing and search engine optimization.

Oversized office:

Rent is expensive. Are you paying for space you don’t really need? Have you filled your office with expensive furniture and equipment? Many businesses can function in smaller spaces or even in a home office. The latter is a great option because it gives you a tax deduction without additional expense, eliminates your commute time (saving money on gasoline), and perhaps reduces your wardrobe costs.

Inefficient employees:

You might spend more on labor than any other expense. Inefficient employees are costly because you are not getting your money’s worth and you might even overstaff to compensate for some bad apples. There are ways to quantify how much an employee is returning to the business. Good employees should return 5 to 10 times what you pay them. If your employees are underperforming, replace them with better ones (even if they cost more) or use contractors instead.

Unproductive advertising:

Do you know your marketing return on investment (ROI)? If not, you don’t have a handle on how your marketing efforts are performing. Many businesses spend a lot of advertising dollars on Google and Facebook. These media sites can provide extensive information about your marketing ROI, but it goes to waste if you don’t use it.

Using paper:

OK, its 2019. Aren’t you ashamed you still haven’t gone paperless? If you had invested in a paperless office, you’d be saving a small fortune on printing and photocopying costs. Plus, don’t you want to save the trees?

Unnecessary travel:

Some transactions require in-person interaction. But does that really pertain to your business? Consider the costs of travel, hotel, meals and entertainment. Chances are you aren’t getting a good return on these expenses. Your time might be better spent conducting your business on Skype, and you’ll save a fortune.

Living the louche life:

You are a business owner, not a superhero. If you burn the candle at both ends, you’ll get burnt. Guard your health by avoiding too many nights entertaining customers, vendors and employees. Your tab will be substantial, and your health might suffer. Sure, you can probably charge off your entertainment expenses, but you may pay in other ways.

Failure to grab opportunities:

In the penny-wise and pound-foolish department, false economies can cost you in the long run. For instance, you might be offered inventory or raw materials at a discount, but you don’t make the purchase because you don’t want to borrow the funds you need. This behavior can stymie growth. The lesson is to use borrowing intelligently. If you don’t, you can be certain your competitors will.

These are just a few of the many ways you can cut waste and increase efficiency. Should you need to beef up your working capital, contact us at IOU Financial for business loans that are easy to get and easy to repay.

Small Business Tax Deductions You Should Know About

2019 continues the new tax regime passed two years ago that proved so friendly to business. The corporate tax rate now tops out at 21 percent. While that’s great for reducing your tax bill, it also means that deductions are worth less than they used to. Nonetheless, deductions help you save money and might make the difference between an overall profit and loss.

Qualified Business Income (QBI)

You can deduct up to 20 percent of your QBI from a U.S. business that operates as something other than a C Corporation. It also works for the self-employed, trusts and estates. Wage income and C Corp income do not benefit from this deduction. The deduction has certain other conditions:

  • Maximum income: Joint filers $315,000, others $157,500. Deductions above these thresholds may be limited.
  • Limit: Lesser of (20 percent QBI + 20 percent REIT dividends + 20 percent publicly traded partnership income), or (20 percent of taxable income minus net capital gains)

Bonus Depreciation

It’s back! We’re talking about 100 percent bonus depreciation that allows you to deduct the entire cost of qualifying assets with useful lifetimes up to 20 years. In addition, the cap on expensing business assets instead of depreciating them is $1 million, phasing out dollar for dollar once you place assets worth more than $2.5M into service. The universe of depreciable assets is wider, and includes lodging furnishings (refrigerators, stoves and beds), HVAC equipment, roofs, and security and alarm systems. They’ve cut farm equipment depreciation periods from seven to five years.

Business Vehicles

Bonus depreciation on business vehicles obtained after September 27, 2017 and put into service in 2018 is capped at $18,000 in year one, $16,000 in year two, $9,600 in year three, and $5,670 thereafter. If you buy a heavy pickup truck or SUV for business, you can qualify for up to 100 percent deduction in year one.

Entertainment Expenses

These generally are no longer available. But you can still deduct holiday parties. You can deduct up to 50 percent of your employees’ meals while traveling on business. The 50 percent deduction on client business meals appears to be intact, but double-check with your tax professional.

Commuter Benefits

Employers can no longer deduct transportation benefits for employees. This includes mass transit passes and parking. However, employers can deduct up to $20/month to subsidize employees who ride their bicycles to work. Alas, these bike riders will be taxed on the benefit. Employees can set aside up to $260 a month in pre-tax money to cover vanpools, mass transit passes and parking.

Net Operating Loss (NOL)

You can offset up to 80 percent of taxable income with NOL in future years. You can carry forward NOL offset indefinitely, rather than just 20 years under the old tax law. You can no longer carry back NOL.

Family Paid-Leave Credit

For 2018 and 2019, you get a tax credit for workers on paid medical or family leave. The credit amount equals 12.5 percent of the wages paid during the leave. That credit is larger when the employers pay workers on leave more than half of their normal wages. There are many strings attached to this credit, so check with your tax professional.

Cash Method of Accounting

If you are a C Corporation, you can use the cash method of accounting if your average gross receipts over the previous three years was less than $25 million. The cap used to be $5 million. This also applies to LLCs and partnerships owned by a C Corporation.

The Best News

The best news is that business loan interest is still deductible! IOU Financial will lend your business up to $500k and you can deduct every penny of interest. So why wait? Contact us today!

Women in Business: Grants for Female Entrepreneurs

The federal government offers a number of grants to small businesses owned and managed by women. Most of these grants allow flexible use of the money as long as it doesn’t go toward startup expenses. The two major houses for information about federally sponsored grants are:

Grants.gov: This is the main databases of federally sponsored grants. You can search it with a keyword of “women” to identify grants of interest. If you’d like to apply for one of these grants, you’ll have to secure a DUNS number from Duns & Bradstreet, register at the System Award Management website and then create a Grants.gov account.

Small Business Innovation Research and Small Business Technology Transfer Programs: This website from the Small Business Administration can be used to identify grant to small businesses involved in federal research and development. A dozen federal agencies pool their grant information here for businesses with up to 500 employees.

There are also a number of national, regional and state grant programs that female entrepreneurs can tap. These include:

  • Eileen Fisher: Until 2018, this company offered a grant program for women in business. It is currently reformulating its grants program and plans to reintroduce it in 2019.
  • Amber Grant Foundation: The foundation awards $10,000 grants to women-run businesses. It is dedicated to a young woman named Amber who died before realizing her entrepreneurial dream. If you are passionate about your business, this program might suit you well.
  • The Girlboss Foundation: Grants of $15,000 each are awarded every other year to female entrepreneurs. In addition, you receive marketing assistance and press exposure for your business. Grant winners must be women owning businesses in the art, music, fashion or design industries.
  • The Halstead Grant: This $7,500 grant is awarded annually to female emerging silver jewelry artists. The program is designed to boost an artist’s career as she starts out. You must submit your design portfolio and answer 15 business questions to compete for this grant.
  • FedEx Small Business Grant: This is a grant contest for women entrepreneurs and businesswomen who are involved in logistics, trade and other related industries. Ten winners are chosen each year with prizes ranging from $15,000 to $50,000.
  • Cartier Women’s Initiative Awards: This program drives change by empowering women entrepreneurs. Each year, 21 women finalists (three from each continent) are awarded. The focus of the program is to support women who make concrete contributions to solving problems that challenge the planet’s future.
  • Grants for Women: This is an online guide for women grants and scholarships. You can search by entering a keyword, or you can peruse the site’s directory of foundations and organizations that offer grants to women. The website filters out schemes and scams to protect applicants from fraud.
  • Open Meadows Foundation: This organizations offers grants of up to $2,000 each to women who run projects that promote economic, racial and gender justice. It is an activist organization that encourages the building of community power through projects implemented for girls and women who have limited financial access. Recipient must have organizational budgets that do not exceed $75,000.

Grants are a wonderful boost for any small business, but unfortunately, aren’t always enough to go around. The next best thing is to obtain funding through a convenient, affordable small business loan, such as the ones we offer at IOU Financial. If you need up to $500,000 funding for your small business, contact IOU Financial today and we can have your money available in days.

Basic Financial Advice for Small Business Owners

Being a small business owner has lots of very difficult challenges that need to be met and overcome. Managing your finances is one of those many challenges that will no doubt be a substantial consideration for those hoping to maximize profits in a small business. Fortunately, there are many ways that you can keep your finances in order.

Keep Track of Your Finances

Organization is the key to keeping your financial situation in order and up to date. You will need to keep up with all of your receipts and invoicing to ensure that when taxes come or even a budget check, that you have an accurate number of how much you have spent and have left. You will also need to keep track of all of your loans and debts you may acquire.

Have Separate Accounts for Your Personal and Business Expenses

You do not want to mix your business and personal expenses. It is best for you to have separate accounts for each. Unless absolutely necessary, do not take money out of your personal accounts in order to “help pay” extra bills. The company should not spend more than it has made without the ability to pay it back through payments.

Be Frugal

Considering the advice given so far, we need to look at the other side of things. There will be things that you will have to spend a lot of money on for your business. Your business will not generate a profit unless you invest some money in it. However, there are several ways that you can do this wisely.

One example you consider is buying used equipment to start off. You can also eliminate unnecessary spending by looking over costs that are not absolutely necessary for the immediate growth of the business.

Additionally, if you feel like you are spending too much money on your office, then you should consider moving to another space or working out of home until you have enough money to fund the kind of office you are looking for.

Hire a Certified Public Accountant

A Certified Public Accountant can help you manage your business finances. They will also be able to tell you about the tax laws and how they apply to your business, which is extremely important, considering just how much rules can change from businesses from state to state in the US.

Furthermore, a CPA can also assist as a tax advisor who can give you professional advice to help you save money in the long term. You may be eligible for a number of tax advantages as a small business owner and a CPA can give you the best advice on how to make the most of that opportunity.

Make Sure That You are Insured

It is estimated that 1 in 12 small businesses will have to close their doors due to the injury or illness of their employees. That is why it is important to have disability insurance. You will also need to have personal life insurance. If you are unsure about the type of insurance that you need, you should speak with an insurance agent. On the off chance something goes wrong, it is good to make sure your financial future does not hang in the balance.

Surround Yourself with Experts

One of the reasons that many business owners fail is because they do not have the right people in their corner. You will need to have a network of people who can support you and give you the valuable advice needed to run and keep up a business.

In addition to an accountant, you will also need a tax advisor, lawyer, and just find ways to mingle with other business owners or investors at conferences that allow you to meet people who have been through your situation and have better insight than you might.

Pay Yourself First

When many business owners get paid, they invest all of their money into their business. They take care of their business expenses and buy new things to help the business grow without first making sure their own personal dues are met. It is important to make sure that when the money comes in, you pay yourself first. You should be saving 10 to 20 percent of your income and make sure you are getting what you need to make a living while running the business.

In summary, it can be very difficult running a successful business. Staying ahead of finances can be one of the most important parts of building a company that will succeed and grow continually. Tools such as Quicken can help you personally keep your finances in order so you always know how much you have in the bank and how much you can spend. This is not just important in the business world, but your personal life as well.

Guest Post: About the Author

Hi, I’m Austin Winder, a Public Relations Specialist and contributing author for Uppercut Box. I live in Memphis, TN and graduated with a business and marketing degree from the University of Memphis.

6 Useless But All-Too-Common Expenses That Turn Your Business Into a Money Pit

It takes a lot of money to keep a small business going – especially if you’re trying to make that business grow. When money is so important, every single cent needs to be spent wisely.

Many small businesses wind up spending a lot more money than they actually need to spend. Those funds would be better off allocated for growth or expansion. Cut the fluff out of your budget and use your newfound cash to help you build a brighter future.

Unnecessary Office Supplies

You’re always going to need office supplies, but changing the way you do things can reduce the amount you’ll spend. Going paperless is one of the easiest ways to save money. Keeping things digital allows you to save on paper, recycling, toner, and printing supplies. Many small businesses burn through mountains of these materials, and paperless businesses barely use them. Going paperless also makes your business eco-friendly, and that’s never a bad thing.

Leasing a Huge Building

You need to give yourself some room to grow for the next year or two, but not for the next decade. While it is a wise move to opt for an office space or retail space that will give everyone some room to move, it’s not a wise idea to overspend on something that you’ll never completely use. It may be wiser to choose a shorter lease on something slightly smaller. If you have your heart set on that huge building, try to negotiate the lease. You might be able to get it for a little less.

High Health Insurance Costs

You need your employees to be healthy, and offering decent insurance is a surefire way to attract top talent. There’s something else you can do that would benefit both your business and your employees. Start a wellness program. A wellness program is much less expensive than high insurance costs, and people who prioritize their wellness are a little less likely to need to use their insurance. Offer up some healthy snacks and partner up with a local gym for a discounted membership. Encourage your employees to use their sick days to discourage them from spreading germs around the office.

Advertising to the Whole World

Small businesses want to acquire as many customers as possible. They take to the internet to spread their message far and wide in an attempt to be heard by the right people. The problem with that overzealous approach is that casting a wide net is expensive. In addition to its hefty cost, it’s more of a gamble when it comes to locating an ideal customer.

Focusing on highly targeted ads will help you obtain customers and spread your message with little effort. If you don’t sell your products online, limit your advertising to people who live within a tight radius of your physical location. If you do sell online within your country, only advertise to people who fit your demographic within that country. It’s the most efficient way to spend your ad dollars. When you expand your business, you can begin to expand your reach.

Having Too Many Employees

It takes a lot to run a small business, and this means you’ll need people to make things run smoothly. Hiring people whom you can barely afford to pay may hinder you more than help you. It might be worthwhile to spend a little more on a rock star employee who is content to wear many hats, rather than paying several people the minimum to deliver an average amount of effort. Quality is more important than quantity when it comes to small business employees.

You can also reduce workload by automating as many processes as possible. The right tools can help you achieve a whole day’s work in just a few hours. Don’t do anything manually unless it absolutely requires live human involvement.

Failing to Follow Rules and Regulations

Making legal mistakes is one of the most expensive situations a small business can wind up in. Small businesses try their best, but sometimes fail to secure the right permits or licenses they need to operate or expand the way they’ve planned. Running a business is a learning experience, but you can’t afford to learn with your money.

It might be worthwhile to retain a lawyer for your small business. You need someone to look over the money, the rules, and the licenses as you grow and change. A lawyer might seem expensive now, but nothing is more expensive than finding yourself on the wrong side of the law.

Many small businesses work with tight budgets, but sometimes those budgets are tighter than they need to be. Keep a close eye on the books to be sure you’re not tossing away the funding for your success.

Guest Post: About the Author

Alana Downer is an avid finance blogger from Sydney, Australia, currently writing on behalf of Learn to Trade– money and finance experts. Interested in all things connected to growing a stable income, Alana might often be found online, sharing her financial tips and participating in discussions. Feel free to reach out to her on @alanadownerLTT.

Tax Season Prep: Five Steps to Get You Ready Now

According to Benjamin Franklin, there are only two certainties in life: death and taxes. Although tax season is still a few months away, it’s advantageous that business owners start preparing for it now. There are certain steps that need to be taken to be able to report the right amount to the IRS and make sure no mistakes are made on your taxes.

Collect Business Records

We’ve all seen movies where frustrated business owner bring a box of receipts to their accountant come tax time. Don’t let this be you—a good rule of thumb for any business owner is to have a systematic way of collecting business records for tax time. If you get in the practice of careful filing of your documents, you will not need to scramble in the spring and spend your time looking for records or frantically calling vendors to ask for receipts or invoices.

An electronic system where you can keep track of all business-related earnings and expenses will make it simple to determine your overall income and deductions you may be eligible for. Plus, this will foolproof your filing system and allow you to access information from anywhere, anytime. Certain programs, such as Quicken and QuickBooks allow you to download your financial information straight unto your tax return.

H&R Block provides a useful checklist of all expenses that will determine your taxable income.

Separate Business and Personal

One of the most common mistakes that small business owners make is failing to separate their business and personal expenses. It’s vital to utilize business checking accounts and credit cards to clearly understand what your business expenses and earnings are to report the correct taxable income amount and determine what deductions you may be eligible for.

If you fail to do this throughout the year, you will spend days trying to determine what amounts were used for your company and what was made for yourself.

Save Receipts

Although it’s not something anyone likes to think about, any business has the chance of being audited. To protect your company, make sure to keep all business-related receipts. The good news is that there are several receipt apps, such as Shoeboxed, which allow you to scan receipts and keep their digital copies. Plus, the apps can be integrated with certain accounting software, making the tax preparation process quick and seamless.

Review Payroll

Before submitting your tax records, review your payroll information with a specialist to verify that everything was calculated correctly and legally. Payroll mistakes can be costly; 40% of businesses pay over $800 to the IRS simply for payroll errors.

Know Your Deadlines

Federal taxes are not the only taxes businesses are responsible for. There are also local city taxes, self-employment taxes, property taxes and payroll taxes, all with their own stipulations, forms and deadlines.

Research these deadlines and note them in your calendar so that you are not penalized for late filings.

If you are anticipating a large payment to the IRS this year, or need funds to invest in getting your business ready for tax time, consider a small business loan from IOU Financial. You may be eligible to borrow up to $500,000 in a quick turnaround of just two business days. Click here to learn more.

How to Make Business Financing Part of Your 2019 Growth Plan

You might occasionally encounter a business owner who has a dim view of debt. That’s unfortunate, because debt, if you manage it properly, can help you grow your business. Here are several ways your business will benefit from the prudent use of debt:

Accelerate growth:

You can use loan proceeds to buy new equipment/facilities, hire more skilled labor and/or purchase additional inventory. This gives you growing room without drawing down your retained earnings. Naturally, you should have a detailed plan that lays out how you’ll deploy the loan proceeds to achieve the desired results. Failing to plan your finances can leave you in a hole when it comes time to service your debt.

Retain full ownership:

You might want to expand your business and are deciding whether to use debt, equity or a mix of both. Remember that bringing on equity investors gives you new “partners” who’s ideas might be different from yours. By borrowing rather than issuing stock, you remain fully in charge and do not have to share profits.

Tax benefits:

You can deduct you loan interest from your business taxes. As you know, every dollar in business is important, so the tax benefits you receive from borrowing are a significant success factor.

Build your credit:

When you pay your loan back on time (or faster), you likely will increase your credit score and boost your credit limit. This comes in handy as you expand your business, because future loans will be easier to access, and you’ll probably get a lower interest rate and/or higher spending limit. Be sure to check your credit reports and scores so that you can correct mistakes.

Avoid asset sales:

If you find you don’t have sufficient funds to complete your growth plan, you might be tempted to sell off your receivables or inventory. However, asset sales have several problems that reduce their desirability. For instance, your customers might not like being billed by a new entity, and this may cause them to question your viability. Furthermore, the haircut you take on asset sales often exceeds the interest you’ll pay on a loan. Why risk doing permanent damage to your business through asset sales when you can take out a short-term loan instead?

Smooth out seasonality:

Seasonal sales variability shouldn’t stop you from expanding your business. Using debt allows you to smooth out the effects of seasonality and keep your growth plans on track. To that end, make sure you borrow from a lender that doesn’t charge prepayment penalties. This allows you to pay off your loan sooner than anticipated without incurring extra charges.

Financing your ideas:

It takes cash, and often lots of it, to pay for the R&D costs associated with a new product or service. You can obtain cash via debt and plow it into your latest research, both from the operational and marketing viewpoints. Using debt instead of equity helps you maintain your trade secrets when they are most vulnerable – in the development stage. Equity investors might require you to reveal valuable information that can fuel the work of competitors.

Cost of capital:

Debt often has a lower cost of capital than does equity. Equity investors not only require a chunk of the profits, but also might require managerial control, a required rate of return and dividends. Debt is simply priced and avoids some of the costs associated with equity financing.

In summary, financing your business’ growth through the prudent use of debt is a winning formula for long-term success. IOU Financial can arrange a business loan of up to $300,000 quickly and with minimum hassle. If you are interested in growing your business, contact us today.

7 Smart Bookkeeping Tips Every Small Business Can’t Live Without

For small business owners, bookkeeping serves as their personal scorecard. Numbers show your success and failure and give a quantifiable shape to your business results

In a small business benefit, your future is on the line. You need to have a good overview of all the expenses and revenue. Perfect bookkeeping can save you a lot of time, money, and nerves.

To help you establish an effective bookkeeping strategy, we’ve assembled this 7-tip list. If you like assessing the numbers and want to keep crucial business matters in your own hands, bookkeeping is the way out. Let’s explore more.

Never mix personal and business finances

For an up-and-coming brand manager or CEO, it may be tempting to achieve as much as possible in as little time as possible.

The over-dynamic outlook could lead to severe financial consequences. In a lot of cases, company heads will use company money for personal expenses and vice versa. Doing so will only cause additional chaos.

When your business is only starting, spending a lot of money is an attractive thought. To prevent tax-related headaches, issue a business credit card along with a separate business account. Taking care of this takes mere minutes and allows you to earn your company a proper credit rating.

“One might find it surprising that a lot of small businesses and startups fail because of improper financial allocation,” explains Josh McCarty, a marketing and economics writer at Brilliantassignment.co.uk. “Separate your finances because mistakes will happen once your business grows.”

Make use of automation

Bookkeeping was once considered a difficult and time-consuming activity. Accountants and bookkeepers had to do everything manually, but a lot has changed in recent years. With the development of AI technology and automated software, bookkeeping has never been easier. There are no more tedious instances of manually creating spreadsheets.

Bookkeeping software makes our lives easier. For one, the data you need is stored in the cloud. Unlike physical storage, cloud storage is safe from any compromising.

No matter the conditions or situation, your data will be stored safely. In addition to this initial security feature, small businesses should immediately connect their banking accounts to bookkeeping software.

By establishing this connection, you will ensure that your books are up to date and that there is no need for last minute checks.

Do regular check-ups

Most bookkeepers and companies keep track of their reports and records on a quarterly basis. A tip that will make your life easier is to check your reports on a weekly basis. The interval here will give you enough time to grow your business, but you’ll also be able to identify any changes in your revenue.

Having a clear overview of your transactions and the overall financial state is a business advantage you deserve to have.

With each new product launch or a promotion, you can see how good the move was by looking at the reports. By analyzing reports from a certain period, you can see if a move was successful or not. If it was, you can repeat it and invest more money or stop implementing it if it was a failure.

Use tracking software to monitor your employees’ hours

Running a small business can face you against some hardships. If you have a dedicated team of employees, tracking their hours might be somewhat difficult manually.

Without knowing exactly how much has someone worked, you risk budgets deficits, imprecise payments and other spending that you don’t need. To prevent this from happening, have your entire small business use time tracking software.

Employees will also find the change refreshing. With time tracking software, they will know exactly how much they’re being owed and when they have vacation time and what was their sick time.

Bookkeeping will be much easier, and your small business will grow exponentially. Integrate the tracking software and the time tracking software for ultimate efficiency and swiftness.

Always track business expenses

Brand growth is something everyone wants to feel, but not to experience. Why is this the case? When small businesses grow, there is another echelon of responsibilities that you have to take over.

Business expenses are just one of them. Even though you might feel good about having a bigger budget, you will find it annoying to file tax reports. Overspending is often a case, and precisely because of that, you need to track your business expenses.

When traveling, make sure you keep every receipt and categorize it accordingly. There are several apps that allow you to scan the receipts and store them on the cloud.

The move might seem simple, but it’s a bookkeeping tip that every small business can’t survive without. By tracking your business expenses, managing your budget and filing tax reports will be much easier.

Don’t be afraid to ask for help

At the beginning of every company’s life, you can most certainly handle all numbers by using off-the-shelf software. However, once you start experiencing growth, you might feel overwhelmed by the sheer number of tasks needed.

Keeping track of everything is important, but many companies tend to shut down because they’re hesitant to hire a professional.

Although it may seem like hiring a professional bookkeeper is unnecessary spending, it’s a massive benefit that can save you a whole fortune. Letting a professional handle your bookkeeping will free up valuable time you can use to focus on making your business grow. Associating yourself with a professional is an investment for the future.

Have your deadlines and tax obligations in a visible place

Bookkeeping is both monitoring the growth of your company and working from deadline to deadline. From tax reports to building business credit, it’s always beneficial.

Tax reports have to be filed, but even the most important deadlines can be missed if you’re overwhelmed. Thus, before undertaking anything new, you should write down all upcoming deadlines and obligations.

Having visible dates will allow you to run your small business without unnecessary stress. Additionally, missing deadlines and ignoring obligations will only bring you problems with the law.

The IRS has many useful tools for calibrating your calendar. If you’re more of an old-fashioned person, you can write them down on a piece of paper. Knowing your deadlines allows you to plan accordingly and increase revenue.

To conclude

Every small business relies on impeccable bookkeeping. Implementing these tips will require minimal effort and bring you maximal results. Remember to always be organized, prepared, and aware of upcoming deadlines. With recent developments in technology, you will rely on software to do the heavy lifting. Just by implementing these tips, you will ensure a fast and beneficial period of business growth.

Guest Post: About the Author

Scott Mathews is a professional content writer in such topics as bookkeeping, work productivity and marketing. Scott`s the biggest passion is blogging and travelling. He regularly takes part in different career growth conferences and contributes his posts to different  websites. Contact him on Facebook and Twitter.

4 Ways Business Loans Support Your Financial Status & Help You Achieve Your Goals

There are a plethora business opportunities in the world today, many of which did not exist decades ago. As technology advances, many digital trends influence the types of businesses that pop up. Even on social media platforms, there are businesses that cover how best to manage social walls and increase followers. One thing is important in all these, whether you are an online merchant or a manufacturer of kitchen wares, whether you render services or sell products, the core of business strength is capital.

The truth is every business needs a solid financial status to be able to thrive. Sometimes, there might be some hitches in the running of a business- like low inventory, the need to hire staff and grow sales, or the need to carry out a profitable marketing campaign. Considering a business loan might be recommended. Although some individuals try to be cautious, there are immense benefits that getting a loan offers.

4 Ways that Business Loans are Beneficial to You

Not every reason is valid enough to seek a loan. However, there are solid reasons that support this. Just like making a purchase comes with costs and benefits, getting a loan can have a positive impact on business when weighed against the cost. Here are 4 ways that this can benefit your business;

Expansion of Business Activities

More customers are coming into your store and you need more staff to cater for the increase in activities, or you need to add a new location to your business, or there are new products and services that your business can provide- if this is the case, you might need to expand your business to accommodate more hands on deck, or have new space for business activities.

It might be very demanding on the finances of your business when it comes to bearing the cost of adding another location or venturing into a new market, even though these moves can boost the profitability of your business.

Getting a loan can ease these processes by providing ready capital for new overhead and upfront costs. In considering this, it is important to have a proper plan and forecast to ensure that the new activity would be profitable enough to cover the repayment of the loan.

Increased Liquidity

For many businesses, inventory is an important component of commercial activities. It is important to keep your inventory replenished and of high quality. With a sales projection, you can forecast the profitability of acquiring more inventory and improvement in cash flow can help you achieve this.

Apart from inventory, day-to-day activities are also crucial to businesses; you might need to train staff, pay salaries or effect repairs on machineries. Loans can improve your liquidity and help you cover these activities smoothly.

Invest in Marketing

Marketing can be the very approach your business needs to pull in more potential customers. However, due to the cost that marketing entails, some businesses tend to put it on hold. This is because successful marketing campaigns require a tangible budget.

Since marketing is needed to spur business growth, investing in a campaign can increase your customer base. Taking up a loan can help you execute a solid marketing strategy, thereby increasing customers and improving the financial status of your business.

You Keep the Profits

Compared to getting investors for your business, one benefit that loans offer is that the profit you make is retained for you and your business. On the other hand, investors require that they have a share in the profits of your business.

With loans, you can venture into new business opportunities, expand your business or get needed equipment, all of which are beneficial to you in the long run even after the loan payments are made.

Every business needs financing no matter the nature. Although some are of the opinion that adding debt counters the growth of your business, with the right approach, debt financing can come in handy and boost your profitability. Not every business needs to take up a loan. There are several things to consider such as the terms of repayment and interest rate. It also requires proper planning and knowledge of the market so as to ensure that the profitability of the business can cover loan repayments and keep you in an excellent financial standing.

Every business envisages steady growth. With the above put in place, loans can improve your financial status and help you achieve goals. Its benefits can still be visible even after the loan has been cleared.

Guest Post: About the Author

Ali Khan is a Search Engine Optimization (SEO) specialist and a content marketer. He works as a search director in a reputable organization. His main area of interest is digital marketing management and SEO outreach. He writes unique and research driven content about SEO analysis, Social media, Physical fitness and more.

Navigating Business Credit: What it is and How to Establish it

Small businesses play no small role in the U.S. economy. According to the U.S. Small Business Administration (SBA), there are 29.6 million small businesses in the United States, which account for 99.9% of all the nation’s businesses.

Small businesses clearly make up the backbone of the US economy. However, many small business owners remain perplexed by the concept of business credit and how it works. More often than not, small business owners take on personal loans and use personal credit cards to fund their businesses, which can lead to financial and organizational headaches. This article aims to do three things:

  • Help small business owners understand the elusive concept of business credit
  • Highlight the factors that affect business credit scores
  • Assist them in building business credit

What Is Business Credit?

Business credit is a line of credit offered to a business that the business can use to pay unexpected expenses, or expected operating expenses when there is a lack of available cash.

Your business credit scoresare represented by numbers that signify whether your business is suitable for loaning money to or doing business with.

There are three primary credit bureaus (Experian, Dun & Bradstreet, and Equifax) that uniquely calculate business credit scores. Each has a different scoring algorithm. Experian and Dun & Bradstreet’s credit scores both range from 0 to 100, while the Equifax scoring scale ranges from 101 to 816.

Similarly to personal credit, those issuing credit to you will rely on your business credit scores in their decision making. The higher your business’ credit scores, the more likely you’ll be able to secure larger credit limits as well as more rewards and benefits.

What Factors Affect Business Credit Scores?

While your business credit scores vary depending on the specific credit bureau’s algorithm, a few general factors that underlie these scores are:

  • Number of trade experiences
  • Outstanding balances
  • Payment habits
  • Trends over time
  • Public record frequency and dollar amount
  • Delinquencies such as liens or bankruptcy
  • Credit utilization (the percentage of your total business credit that is being used)
  • Demographics such as years on file, Standard Industrial Classification codes and business size

5 Tips To Build Business Credit

Creating business credit is not something that happens automatically. It requires multiple steps on the part of the business owner. Building business credit will not only benefit the business’ credit scores, but open more credit card and loan options for the business. These funds allow the business to keep growing.

In the instance that you have never incorporated your business, or you are starting a small business from scratch, this quick guide will direct you down the path of building your business credit.

1. Incorporate Your Business

The first step on the road to building business credit is to separate yourself from your business through incorporation. Through incorporation, your business will become a distinct legal entity from your person. The U.S. Small Business Administration provides an in-depth guide to launching your business, including incorporation, which would be recommended for all budding entrepreneurs and small business owners.

2. Obtain an Employer Identification Number (EIN) from the IRS

An EIN identifies your business for credit and tax purposes. It’s essential to get an EIN number for an SBA loan. In most cases, it is necessary to have one to open business bank accounts. An EIN allows business owners to separate their social security numbers from their businesses’ credit profiles.

3. Register with Dun & Bradstreet

When a business applies for business credit, lenders and suppliers commonly perform a credit check through Dun & Bradstreet. Register and set up a company profile under Dun & Bradstreet’s database in order to start establishing credit. Dun & Bradstreet will issue a nine-digit DUNS number that is universally used to identify businesses.

4. Open a Checking and Savings Account for Your Business

Open both a checking and savings account in your business’ name. This is done using your recently provided EIN and DUNS numbers. By doing this, you’ll separate your personal and business finances.

A business savings account is not mandatory, but is an intelligent move for any small business owner. A business savings account can assist when an unexpected cost arises and it can also be used as security for taking out a small business loan.

5. Obtain a Business Credit Card & Responsibly Manage Your Finances

Business credit cards are key to building business credit. It’s recommended that these credit cards should be commercial in nature and used for business expenses. Business owners should put any business credit accounts in the name of the business using their EIN and DUNS numbers.

It should be noted that not all business credit cards are created equal. Different business cards provide different types of rewards and benefits. Business owners should do their research and find business credit cards that aligns with the goals of their businesses.

While obvious, it is imperative to maintain excellent financial behavior to build business credit. Make sure to keep your credit card utilization low, pay all bills on time and in-full, and use a variety of credit.

Conclusion

Building strong business credit is not something that’s automatic or instantaneous. It requires business owners to be proactive and behave with financial responsibility. Time and excellent financial behavior are necessary ingredients in establishing high business credit scores for your small business. By understanding the core business credit concepts and following these tips, your business credit scores should be flourishing in no time.

Guest Post: About the Author

Courteney Reed is dedicated to empowering people to make smart financial decisions. As a financial industry analyst, she is driven to provide the most current and highest quality information available.