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The Pros and Cons Of Bookkeeping in QuickBooks Online For Small Businesses

The Pros and Cons Of Bookkeeping in QuickBooks Online For Small Businesses

Are you thinking of using QuickBooks Online to manage your business’s bookkeeping? If so, you’re not alone. In today’s fast-paced digital world, no business can afford to lag behind, making software an essential component of success. Small businesses, in particular, must be agile to succeed. Fortunately, technology makes it easier than ever for small businesses to connect with potential customers and streamline operations.

Many businesses use QuickBooks Online for their accounting and bookkeeping needs for good reason. It can be an excellent program for managing financial information, streamlining processes, and reporting on performance.

However, there are pros and cons to using QuickBooks Online as your business’s bookkeeping solution. Let’s discuss the advantages and disadvantages you should consider before deciding to use QuickBooks Online for your company’s bookkeeping needs.

 

The Pros of Bookkeeping in QuickBooks Online

There are many advantages to using QuickBooks Online as your financial platform. Here are just a few of the biggest pros to using QuickBooks Online:

  • Easy setup – QuickBooks Online has a simple setup process that can be completed in a matter of hours. You should spend plenty of time setting up the system so that it is optimized for your business. The process is straightforward, and plenty of resources are available to help you make the most of your setup.
  • Excellent user interface – One of the best parts of QuickBooks Online is its user interface. It makes using QuickBooks Online easier and more intuitive.
  • Powerful reporting tools – A good accounting solution should allow you to view your financial situation, as well as that of your customers. This can be especially important if you have a subscription-based business model. QuickBooks Online reporting tools allow you to view critical information quickly and easily, allowing you to make smart decisions quickly.
  • Data security – Unfortunately, data breaches are a real problem in today’s business world. QuickBooks Online provides plenty of security features to protect your data. This can help you sleep better, knowing your data is safe from malicious actors.
  • Affordability – QuickBooks Online is one of the more affordable options on the market. If you want to be able to use bookkeeping software that is not going to cause your finances to struggle, this is likely the best option for you.

Protea Financial Bookkeeper with QuickBooks Experience

The Cons of Bookkeeping in QuickBooks Online

Despite the advantages of QuickBooks Online, it isn’t the perfect solution for every business. There are drawbacks to using QuickBooks Online for bookkeeping. Here are a few of the cons to using QuickBooks Online:

  • It is not always the best for growing businesses – While QuickBooks Online is a great solution for small businesses, it may not be the best choice for growing ones. You may need to upgrade your accounting solution as your business grows and expands.
  • Data limitations – While QuickBooks Online has robust reporting, you cannot always use all of it. You cannot use certain features if you have customers governed by specific data laws.
  • Feature limitations – Some small businesses will find that QuickBooks Online lacks features. For example, if your business relies on eCommerce, some features that can help you track purchases may be missing.
  • It doesn’t integrate with everything – Not all software integrates with QuickBooks Online. Some services you may want to use won’t work well with QuickBooks Online, which can create issues for some small businesses.

 

Should You Use QuickBooks Online for Small Business Bookkeeping?

If you are still on the fence about whether QuickBooks Online is the right solution for your business, here are a few factors to consider. Accountants recommend that companies keep their books for at least seven years. If your business is new, it has no history to report, making a new software title a viable option.

If your business is growing, you may need a better solution than QuickBooks Online. If you are unsure if QuickBooks Online is right for your size business, consider reaching out to a bookkeeping specialist here at Protea Financial. Our experts can help you decide whether QuickBooks Online is the right solution for your business today and in the future.

Turning to an experienced bookkeeper can get guidance on reading the different reports and accessing the various financial reports QuickBooks Online offers. Should you decide to use the QuickBooks Online platform, you can either go through the process of setting it up yourself or turn to an outsourced bookkeeper with QuickBooks Online experience for help.

Protea Financial QuickBooks Online

Tips for Deciding if QuickBooks Online is Right for Your Small Business

Here are a few tips to help you decide if QuickBooks Online is the right solution for your business.

  1. Do your research – When you decide to use a new accounting solution, you put a lot of trust in that solution. You want to make sure you’re putting your trust in the right place. Make sure you do plenty of research before settling on QuickBooks Online.
  2. Ask questions – If you are in the process of deciding whether or not QuickBooks Online is the right solution for your business, don’t be afraid to ask questions. You can’t make an informed decision unless you have all the necessary information. Be sure to ask any question you may have to make sure you have all the information you need.
  3. Pick the best option – There are many variations in bookkeeping software, including QuickBooks Online. If you are unsure if the one you are looking at will fit, explore the possibilities. Look at each feature and add-on before deciding on any software title.

You can do a few things to ensure success if you choose to go with QuickBooks Online for your company’s bookkeeping needs.

  • Make sure the data you input is accurate. This can help you make intelligent financial decisions faster.
  • Make sure everyone who needs access to the system has access. This can help reduce the time spent managing the system and allow you to focus on more important things.
  • Make sure QuickBooks Online is integrated with as many services as possible. This will help reduce headaches and keep things running smoothly.

There are many valuable tools within QuickBooks Online. Make sure you take the time to explore it properly to get the most value for your money.

 

Let Protea Financial Help Your Small Business Succeed

Deciding on one specific software for your business can be a daunting task. Thankfully, you do not have to make the decision alone. Turn to the financial experts here at Protea Financial today. We can help guide you toward the best possible bookkeeping software for your business.

You can also turn to us as virtual bookkeepers so you can focus on your business while we track your financial information for you. Put our years of experience to the test. Contact Protea Financial today so you can get your business on the right track.

Protea Financial Can Help You Learn QuickBooks Online for Small Businesses

Here at Protea Financial, we understand that finding the right software solutions is not always easy. If you are considering QuickBooks Online for small businesses, then reach out. We can help!

Is Your Small Business Ready for the Recession?

Is Your Small Business Ready for the Recession?

Small businesses are often hit the hardest when the economy takes a downturn. With fewer customers spending less, many small businesses must cut back in order to stay afloat. In these times, it is more important than ever for small businesses to be as frugal as possible and have a plan for staying afloat during recessions.

Whether your business is just starting out or you’re looking to revamp your company before things get worse, our goal here at Protea Financial is to help you get ready for challenging times ahead. Get acquainted with some common risks that small businesses face during recessions, and learn strategies to safeguard yourself from potential pitfalls. Here are some practical tips on keeping your business safer through this period of instability.

 

What a Recession Can Do to a Small Business

A recession is a time when the economy slows down, and companies experience reduced sales, fewer customers, and higher costs. One of the most common effects of a recession is that it can harm small businesses, and this is because smaller companies may not be able to absorb the impact of reduced sales, so they may have to make significant cuts in their workforce.

If this happens, some employees may leave the company, which could lead to further reductions in staff numbers. Furthermore, if a small business goes through a period of financial difficulty, it may be tempted to take on more debt.

However, when the economy improves, this debt may make it harder for the company to repay its loans. Therefore, it could end up with even deeper problems than it started with.

Protea Financial Getting Ready for the Recession

Protect the Assets That Matter Most to Your Business

If you want your business to weather a recession, you have to be ready for one in advance by maintaining a tight ship. This means cutting discretionary spending so you have a healthy cash flow. You can cut out company-paid snacks, or put someone in charge of finding vendors that may offer better prices.

Carefully track your expenses so you know where your money goes and you can be sure you are not spending unnecessarily. Tracking your business expenses is often best left to your bookkeeper, as they can do it in less time and with more accuracy than you likely can.

Other options you have to protect your assets include:

  • Bolster your relationships with your customers. This can keep business coming in, and sometimes even attract new customers during this unpredictable time.
  • Get insurance policies that can help keep your business safer in the event of an unexpected event or emergency.
  • Place the money you save into a savings account so you have cash reserves should you need them.
  • Keep your company’s employees happy. It costs far more to bring in a new employee than it does to keep your current employees. Turnover is expensive, so make sure you offer options like competitive salaries and health benefits to keep employees with you during these tough times.
  • Protect your company on all fronts, including making sure you have cybersecurity protection in place, as well as proper backups. The expense of losing data is much higher than replacing an up-to-date backup.
  • Always maintain the highest reputation that you can. This allows you to build and maintain strong relationships with customers, who will typically keep buying from the companies they know and trust.

 

Save Where You Can

As you prepare your company for a recession, one of the best ways to stay afloat is to save where you can. This includes cutting unnecessary expenses and setting up automatic savings plans to save for the future.

Start by making a list of your business’s expenses and cutting any unnecessary ones that you can. Look for any areas where you can save, such as by reducing your energy use during business hours or by outsourcing some services if they are not absolutely necessary.

Another way to save money is to open up a savings account where you can store away money for a rainy day. You should also open up an emergency fund where you can store money to help pay for unexpected expenses such as repairs or to help meet payroll when cash flow is low.

 

Stay Flexible

A recession can often come out of nowhere, and it can be easy to be unprepared if you are not keeping an eye on the economy. As you prepare for a recession, you must keep an eye on any potential warning signs that one may be approaching. This includes monitoring major economic indicators and listening to what analysts and experts have to say about current events.

When a recession does hit, one of the most important things to do is to keep working. It’s easy for small businesses to get overwhelmed and paralyzed when a recession hits. By continuing to work, you can ride out the storm and be in a better position to emerge on the other side once the recession is over.

Protea Financial Is Your Business Ready for the Recession

Learn More About Your Finances to Protect Your Small Business

Every aspect of a small business is vulnerable to financial loss, especially during the uncertain times of a recession. Your cash flow, sales, inventory, and more can be affected by unexpected expenses, including the costs of an emergency. Understanding your business’s financial health allows you to protect your business from potential financial losses better.

You can use several tools and financial reports to assess your financial health and identify areas for improvement. Some examples include:

  • A cash flow forecast that shows expected incoming and outgoing cash flows over time.
  • An income statement that shows revenue and expenses over time.
  • A balance sheet that shows assets, liabilities, and owner equity in a single snapshot.
  • A profit and loss statement that shows income and expenses over time.

Watch Your Cash Flow

If your business is tied to the economy’s health, you’ll want to keep an eye on your cash flow. When the economy takes a downturn, customer spending decreases, and you can expect less revenue to come into your business as a result.

It’s important to keep a close eye on your cash flow during these times and make sure you have enough cash on hand to get you through any rough patches. This includes having enough in your savings account to cover payroll and other expenses. It’s also a good idea to have a line of credit or business credit card available in case of emergencies, like sudden drops in revenue.

One important thing to keep in mind is that your customers’ payment timelines may also change during recessions. Credit card companies often extend payment deadlines and give users more time to pay their bills. Your customers may also be more likely to pay in cash during tough times, so you should factor these changes into your business’s cash flow projections.

 

Protea Financial Can Help You Learn Ways to Get Ready for the Recession

A recession can be a trying time for many small businesses. Make sure you are ready for one by keeping a close eye on your expenses, protecting your cash flow, and saving money whenever possible.

Stay focused and keep working during tough times; your business will be better positioned to emerge stronger once the recession ends. For help learning about how you can improve the health of your business or understand where your business stands, contact Protea Financial today!

Get Ready for the Recession with Protea Financial As Your Guide

Getting ready for the recession is a must for small businesses that want to survive. Let us help guide you. Contact us now and let us help!

What Goes Into the Cost of a Bottle of Wine

What Goes Into the Cost of a Bottle of Wine

You may not have thought about this, but it is a common question among winery and vineyard owners, not to mention wine aficionados. Customers always ask vineyard and winery owners why wine is priced the way it is. If you have ever wondered how your favorite bottle of wine is priced, or you are thinking about changing the price of your wine, here is a go-to guide on wine pricing.

 

The Cost of the Grapes Themselves

One of the largest expenses wineries have when they make a bottle of wine is the cost of the grapes themselves. Each grape variety has a price tag, usually measured in tons. For example, the Caberlot grape, an extremely rare wine grape that is only cultivated in one area of France, is extremely expensive to purchase. By comparison, the Pinot Grigio grape is much more cost-efficient, not to mention versatile. No matter which grape variety you use, a lot of wine can come from a ton of grapes. Wineries can make about 2 barrels of wine from one ton of grapes, which equals 720 bottles of wine from one ton of grapes.

Of course, when you buy grapes by the ton, you aren’t just paying for the grapes. You are also paying for the cost of growing the grapes, including the grape seed, organic fertilizers and pesticides, the labor needed to harvest the grapes, and even the startup costs for grapevines. Since it can take up to four years to produce the perfect wine grape from the original grapevine, it’s no wonder a ton of grapes isn’t cheap.

 

The Cost of the Barrels and Tanks

Wine production can’t happen without wineries aging the wine in barrels or barriques. Whether you call them barrels or the French barriques, your winery has to pay for the wine to age. The cost of the barrels used to age wine vary depending on the type of wood used, and each winery has a preference for which wood ages wine the best.

In many areas of wine production in the United States, white oak is used for wine aging barrels because it is porous and works to age wine quickly. However, winemakers may prefer several other kinds of wood over white oak to age wine, such as hickory, redwood, maple, French oak, walnut, cherry, or chestnut. All of these types of wood may be used by wineries for aging, and each wood adds flavor properties to the wine. For example, a winemaker may love the redwood barrel for aging wine because it adds a note of dark spice especially coveted by some red wine drinkers. No matter which type of barrel you choose, you’re going to pay a pretty high price for a barrel. French oak barrels are extremely expensive, with some barrels made from French oak selling for $3000.

Fermentation tanks for wine is also an extremely viable solution in terms of aging your wine. These tanks are typically controlled by a computer to give each batch the ability to stay at a previously regulated temperature. While Stainless Steel tanks are going to be more expensive than a traditional barrel, the fact that they tend to deprecate slower, easier to clean, and allows you to roll the deprecation costs into your bottles of wine at a much more accurate rate.

Protea Financial Wine Barrels

 

The Costs of Wine Production

Winemaking doesn’t end with the barrel, of course. There is a lot to be done once the wine finishes aging in the barrel. You have to figure in the cost of personnel needed to bottle the wine and those costs of production.

Wineries have to have machinery for bottling the wine or, in some instances, personnel to bottle the wine. All of those production costs which is going to include:

  • Labor costs for employees of the company
  • Utilities
  • Building costs such as rent, lease, or mortgage payments as well as maintenance.

For some companies, the points mentioned above might not apply, especially if you have a wine making agreement with another company or manufacturer. In these agreements, you’ll typically be charged a flat monthly rate or a per gallon rate to produce your wine, making it easier to incorporate that cost into your per bottle pricing.

Wine production costs can vary greatly depending on the size of the winery. If you have a small vineyard of about an acre, you are bottling around 720 bottles of wine each year. Your wine production costs will be much smaller than a huge winery with tens of thousands of acres of grapes to pick, age, and bottle. However, you cannot always assume the larger production of wine equals less expensive wine. There are small vineyards where more expensive grapes are grown, and the wine is small-batch, but the cost of the bottle is extremely high because the wine is in demand. Demand for a particular wine vintage can drive up wine pricing.

 

Bottling Costs to be Considered

There is so much that goes into bottling wine that each area that oftentimes some aspects of it get overlooked or estimated so hastily that you be losing out or wasting money. 

Glass Bottling

Besides production costs, wine pricing includes the price of the wine bottle. Wine bottles have been used for centuries to bottle wine. Usually, winemakers favor clear glass or green glass for making bottles. Of course, the fancier the bottle, the more expensive the wine will be. Pricy crystal wine bottles have been used for aging expensive wine. Also, more expensive wine bottles have a thicker glass with indentations on the bottom of the wine bottle for better aging. The most important factor for wine bottles is their ability to keep out oxygen so the wine can be flavorful for decades.

 

Closures

The tree bark used to make corks is nearly as old as the bottles themselves. Like wine barrels and bottles, many winemakers favor particular types of cork. Most winemakers favor oak corks, but specialty winemakers would rather have French oak or redwood corks. This doesn’t even include synthetic options that are available. The fact of the matter is, with the large variety in closure options available and how each type can affect your wine, this pricing segment typically gets special consideration.

 

Labeling

Wine labeling can also be pricey, depending on how much the wine labels cost to produce. Also, you most likely did not come up with the label yourself. One aspect of marketing that is often overlooked is branding with labels. You have to come up with a visual representation of your wine brand. Simple black and white wine labels are the least expensive, while full-color, gold-edged wine labels are the most expensive.

Protea Financial Cost of Grapes

Other Costs You Need to Consider

Just because you have figured out the costs of wine production so you can price your bottles doesn’t mean that is the price your customers actually pay for that bottle. If you only price your bottles for sale in your winery, you don’t have to worry about the differences between wholesale and retail margins. However, when you sell your wines to liquor stores and restaurants, you need to understand your wine bottle will undergo a markup. The wholesale price markup is usually your profit margin, and the retail price markup represents the profit margin for the store or restaurant. Usually, there is between a 30% and a 50% markup for a bottle of wine. If you sell a bottle of wine to a retailer for $20, it will most likely sell for $30 to $35 a bottle at a liquor store.

Restaurants and bars also mark up bottle prices, whether they sell the wine by the glass or bottle. In fact, a glass of your wine at some restaurants could be as much as the wholesale price of the bottle of wine. Both wholesale and retail pricing for wine depends on the demand for the particular wine vintage.

 

How Should I Price My Wine?

It can be challenging to price a bottle of wine from your winery. You have put your heart, soul, blood, sweat, and tears into your passion for winemaking, and you want to price the wine according to the effort. However, when you price a bottle of wine, you need to consider a number of factors. All of these questions translate into numbers for wine pricing for your business.

  • How much did the wine production cost?
  • How much did the wine cultivation cost?
  • Is the wine vintage in demand, or is it exceptionally a rare vintage?
  • Is the wine small-batch aged?
  • How much did marketing and sales cost you?
  • Who do you primarily sell to?
  • Is your vineyard and winery in demand?
  • What type of grapes did you use?

 

For Additional Help Costing Your Wine Contact Protea Financial Today

Many factors go into pricing a bottle of wine, and it can be complicated to determine a pricing strategy for your wines. The numbers can float around your head in a confusing swirl of numbers. However, keep in mind that pricing should not be an emotional issue, no matter how much love you put into the bottle. You need to make sure your pricing strategy is based on solid numbers. If you need help pricing your wine for sale on the wholesale or retail market, you need to consider Protea Financial. We have bookkeepers, accountants, and inventory managers who understand the vineyard and winery business because that is their specialty. When you need help with the financial end of accounting and bookkeeping, we can help get you organized and help you reach your business goals. Contact Protea Financial today.

Protea Financial Can Make Figuring Out the Cost of a Bottle of Wine Easier

Costing out a bottle of wine can be a complicated endeavor. Turn to the financial experts here at Protea Financial today and let us help! 

Costing Methods for Wine

Costing Methods for Wine

As a winery owner, you are probably far more concerned with wine production than wine pricing. That’s understandable because if the wine isn’t good, it won’t sell regardless of price. However, you need to get a fair price for your wine to recoup your production costs and stay in business. Wine pricing can be tricky. To ensure you have priced your wines at a price point that will both make you a profit and sell your wine, you need to understand costing methods. Here are the most common costing methods and which costing methods are appropriate for wineries to use.

 

Important Definitions

Before we can begin discussing costing methods for wineries, you need to understand the cost definitions for product producers, including wineries.

A fixed cost is easy to understand. Fixed costs are costs that do not change from month to month. Fixed costs include rent or mortgage on the winery buildings and land. Taxes, such as employee payroll taxes and property taxes, are also examples of fixed costs. Usually, you know exactly how much your fixed costs will be. You receive notices for property taxes yearly, and state or federal governments designate payroll taxes.

While fixed costs are the same for months or even years, even fixed costs change over long periods. Your property taxes will eventually rise, for example. But generally, fixed costs do not change month to month. If this is confusing, you can keep in mind that fixed prices don’t change with an increase or decrease in your wine production.

The opposite of fixed cost is a variable cost. Variable costs vary by the number of products you produce. Usually, the more wine you produce, the higher your variable costs will be. For most wineries, the highest variable costs are materials costs for wine production, such as barrels, corks, bottles, and labels. While your fixed costs will not change monthly, your variable costs will change monthly.

Total cost is much easier to understand. When calculating your total costs, you are adding all of your fixed and variable costs together to come up with the total cost of production.

You’ll need two more definitions of cost before we move on to costing methods for wine. There are direct and indirect costs of production. Direct costs are the costs of all the materials involved in the production of the wine, as well as the cost of labor you have used to produce the wine. An example of a direct cost would be the salaries or hourly wages you pay your bottlers at the winery.

Indirect costs are sometimes referred to as overhead. An example of indirect costs would be the utilities for the winery. Those utilities would include the electricity for your bottling area and a wine-tasting room with a retail outlet. Because the utilities are for the entire operation, rather than just the bottling area, they are counted as an indirect cost.

 

Types of Costing Methods

Now that you understand the costing method definitions, we can talk about a couple of common costing methods for wine that you should be aware of.

Protea Financial Standard Cost Model

Standard Costing

Many wineries use the standard costing method. Standard costing is excellent for companies trying to establish a workable budget. In standard costing, businesses make estimates for their production costs. Fixed costs are easy to estimate because they don’t change from month to month. Direct labor costs, such as payroll, are included in the production costs. There are variable costs as well within the standard costing method. The cost of materials is the most important variable cost that needs to be estimated in the standard costing method.

Using the standard costing method will be easier if you have been in the winemaking business for a while because of the variable costs. It is much easier to estimate costs for your wine bottles each year if you have been buying them for years for your winery.

There are advantages of the standard costing method. First, standard costing is very efficient. Using the per case method, you can look at the estimated projected costs for your business for an entire year on one simple sheet. Also, standard costing allows you to manage your business budget more effectively because you will be able to check monthly if your expenses are staying close to the budget or if the expenses are constantly running over budget.

Many wineries use the standard costing method for several reasons. First, because many wineries sell wine by the case, using the standard costing method simplifies the accounting and budget process. The numbers in standard costing are easy to understand. Also, the accounting costs for wineries when they use the standard costing method is less expensive. Finally, using the standard costing method allows wineries to analyze the difference between the actual costs of the wine and the standard costs predicted for the year. A year-end examination allows wineries to dig into what led to the variance between costs so that they can produce more accurate costing methods each year.

 

 

Specific Item Costing

In addition to standard costing, many wineries also use specific item costing. In specific item costing, costs of production are accounted for in each bottle or case of wine. If you own a small winery, specific item costing may be perfect for your business. Specific item costing is also great for wineries with high-dollar values or vintages. 

For example, when you price a case of wine or a bottle of wine, you use the item number to assign all the costs that figure into the price of the case or the bottle. So in that bottle of wine, you have all the direct costs (materials, labor) and indirect costs (rent, utilities, and insurance) needed to make the wine.

Specific item costing may make more sense for your winery, especially if the costs of your bottles of wine continues to increase dramatically. Also, many wineries like specific item costing, as it allows them to figure out how much to price their wine for on the market.

 

Protea Financial SKU Management

Which Costing Method Would Work For Me?

Before you decide which kind of costing method works well for your winery, there are a few factors you need to consider. You will want to choose the best costing method possible for you and your business. If you have friends, family members, or business acquaintances in the wine industry, you may want to talk to them about which costing method they prefer.

First, consider the size of your winery. For this example, we’re only going to focus on one critical aspect, SKU management.

 

  • How many different SKUs do you have?
  • How many different components are tethered to each individual SKU?
  • Which of these components are used for multiple SKUs?
  • How are you currently tracking each of your SKUs?

 

When you look at the potential avalanche of information from this one component of your business, it’s clear why there are several different costing methods. One costing method may work better than another for your business. A larger winery may want to use standard costing, while a smaller winery may want to use job costing. Again, there are advantages and disadvantages for each method you use when considering the size of production.

Second, you need to consider the price of your wines. Brand recognition plays a critical factor in your pricing model. For example, if your brand is synonymous with the quality standards of high society, your pricing model will be much higher than a smaller, lesser-known brand.

You also need to think about the demand for your wines. For example, if you are currently struggling to keep up with the demand for your wine, it is likely time to consider increasing the cost per bottle. If you’re on the other side of the spectrum and have more bottles of wine sitting in storage verse on the shelves and in people’s glasses, it may be time to consider reducing the costs of your wines to find a better balance.

 

Turn To Protea Financial for Bookkeeping Help Today!

Protea Financial can help you with bookkeeping, accounting, financial management, and inventory issues. We specialize in wineries, and we know we can help you grow your business. Find out how we can help. Contact Protea Financial today!

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Cost methods for wineries is more complicated than most other businesses. For help keeping the documentation straight, give us a call here at Protea Financial!

Information Your Bookkeeper Needs from You

Information Your Bookkeeper Needs from You

The pandemic has changed many of the types of business success stories. For example, one local restaurant saw their business traffic fall to nearly nothing in the face of pandemic shutdowns. Instead of closing the business, the restaurant switched to carryout and delivery of food and liquor, and thrived. Your business has managed to thrive as well, and you may be wondering what your next step should be. You need to think about hiring a bookkeeper.

Small business owners are often worried about a lot of things, but hiring a bookkeeper isn’t typically one of them. Starting a business means you are trying to decide when to open a location, hire employees, and apply for business loans to expand. The last thing many business owners worry about is a bookkeeper, but it should be higher up on your list. Small business owners usually take their time hiring a bookkeeper because so many other details need their attention.

Business owners focus more on getting and maintaining customers, marketing, product placement, employee retention, and making their business as appealing as possible. Once a business owner hires a bookkeeper, nearly 90 percent of them say they will never go back to life before a bookkeeper. Why would they, when a bookkeeper saves them both time and money?

If you are new to having a bookkeeper on your staff, or you are thinking it is time for you to hire a bookkeeper for your business, there are items you will need to begin saving for your bookkeeper and information your bookkeeper needs to make sure your business continues to prosper. Here are the items your bookkeeper will need to do their job.

Protea Financial Save Your Receipts

Save Your Receipts

Collecting receipts from your business means that you need to find a place for all of that paper you’ve stuffed in your wallet or in an envelope sitting on your desk. One of the most important items your bookkeeper needs are your receipts. You may have never saved your receipts before, especially if your business is small and growing, but now is the time. Bookkeepers are all about keeping track of your money that comes in and goes out of your business, so receipts are extremely important.

Your bookkeeper will need all of your business receipts. If you’re questioning why receipts are important, here is an explanation of their importance to your money and your business financial records.

First, if you keep your receipts from business expenses, both your bookkeeper and your accountant can use them to justify your tax returns at the state and local level. One of the reasons business owners intensely hate doing their taxes is because of the paperwork involved. With receipts, you’re able to justify your expenses for your business taxes. For example, if you take clients to business lunches or dinners, you can deduct that expense from your taxes. If you eat a lot of lunches and dinners out during the year, the money adds up. It will be worth it for your business to keep track of where the money went. If you get money back on your taxes, you may be able to buy new equipment, find a larger office space, or hire new employees.

Also, while auditing of business taxes is more rare than audits for personal taxes, one out of 100 business are audited yearly. The average time businesses spend on an audit is from three to six months—if you have your paperwork in order. If you aren’t organized, a business audit can take up to three years or longer to complete. No one wants to go through an audit, but if your business is audited, all of those receipts you saved will be used by your accountant to justify your business expenses.

Another really important reason you’ll want to save your receipts to give to your bookkeeper is to reconcile your business accounts. Bookkeepers excel at reconciling your business accounts, so that when you look at your banking information, your accounts will be current and perfectly balanced. This is a giant time suck for business owners, so handing over receipts means a lot less time you waste on your bank account balances.

 

Your Bills and Invoices

Businesses get bills and invoices in the mail daily, and you may be tempted to toss those bills in a tray and forget about them for a few days. Taking the time to input bills and invoices into your business records can be time consuming. However, instead of putting those bills and invoices in a tray, put them in an envelope or accordion folder to give to your bookkeeper. First, if you pay your bills, and put them in a folder, you will be able to manage your business money more effectively. Second, if your bookkeeper keeps track of your bills and invoices, when something doesn’t seem right, and you know you paid an invoice, even though the business says you didn’t, you can prove it thanks to your bookkeeper.

Keeping track of your bills and invoices means that you have a paper trail for taxes, because invoices and bills are part of a business’ tax liability. Your bookkeeper will also be able to balance your accounts so you always know where your money is going.  The larger your business grows, the more important it will be to keep track of all of your income and outgoing expenses as part of your business assets and liabilities. If you are looking to find additional financing, your prospective lender needs an accurate record of all of these expenses. It’s time to get all of your money in order.

 

 

Deposit Slips, Canceled Checks, and Banking Information

Some business owners use electronic checks or online banking, and never write paper checks, while others use a combination of paper and electronic checks. No matter what kind of checks you use, you need to give your bookkeeper your banking information for them to do their job properly. Your bookkeeper will use the information to keep track of the flow of money coming into and going out of your business accounts.

Business owners are increasingly concerned with business fraud, and they need to be. Fraud affects thousands of small businesses each year, and the average cost of fraud for small business averages in the hundreds of thousands of dollars. If you are concerned about giving your bookkeeper all of your banking information, there are ways you can limit their access for your security. Be sure and ask your bank or credit union how you can limit your bookkeeper’s account access to protect yourself and your business.

 

 

Information About Your Business

Your bookkeeper needs information about the type of business you’re running in order to keep your records properly. You need to give them information about what your business does, where the income and liabilities are in your business, and how many employees you have. You’ll want to share your mission and vision, as well as the goals and objectives for your business moving forward. The more information you can give your bookkeeper about your business, the better your bookkeeper can help you keep your business moving forward.

Protea Financial Payroll Information

Payroll Information

One of the largest expenses any business has is payroll, especially now. The Covid-19 pandemic and the Great Resignation have left business owners with huge payroll expenses. In fact, payroll can account for between 15 and 30 percent of your business’ gross revenue.

Your bookkeeper needs access to payroll information in order to keep your business taxes current and ensure that employee withholding is correct. If you are behind in your payroll taxes, you can face state and federal penalties. Your bookkeeper can ensure you are paying the correct amounts in payroll taxes to the government.

 

Tax Documents

You will want to give your bookkeeper access to all of your business tax records dating back to when your business opened. If you’ve been in business for a long time, you can give your bookkeeper access to your tax documents from the last seven years. If you allow your bookkeeper access to your tax documents, they will be able to keep track of your tax debts and payments at the federal and state level. This will help your accountant track your tax expenditures and give you forecasts for your tax liabilities moving forward. Businesses who are able to plan for tax expenditures won’t be surprised with a huge tax liability in the new year.

 

Contact Protea Financial for Help with Your Business Bookkeeping

While you’re pondering what your next move in business should be, you need to consider hiring a bookkeeper. While hiring someone to help you keep track of your business income and expenses will cost you more money upfront, it’s worth it. Hiring a bookkeeper is essential for any small business on the move. Your bookkeeper will save you both time and money in the long run. No matter whether saving time or saving money is more important, a bookkeeper can help you accomplish both, not to mention saving you hours of worry and stress. If you need help finding the perfect bookkeeper for your business, we can help. Protea Financial has bookkeepers that can help you get your business books in order, no matter what your business is. Contact Protea Financial today.

Let us Help You Gather the Information Your Bookkeeper Needs Now!

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7 Tasks You Can Ask Your Bookkeeper to Do for You

7 Tasks You Can Ask Your Bookkeeper to Do for You

You’ve got a great bookkeeper. They are organized, detail-oriented and understand the basic concepts of accounting. They keep your books in order, perform analyses and balances, and can handle even the most complex of tasks. They are the perfect business partner, and they are great at what they do. However, are they doing everything they can to help your business? Yes, your bookkeepers are great at recording transactions, reconciling accounts, and performing other financial tasks. But that is only part of the job they could be performing. If you want your bookkeeper to become the invaluable partner you need and could not live without, you need to give them the chance to shine. Here are seven tasks you can ask your bookkeeper to do for you to help your business thrive and grow.

Create a Financial Statement

If your business generates revenue, you need to track that revenue and create a financial statement. Every quarter, your bookkeeper will add up your sales and subtract expenses to calculate your net profit or loss. But what do you track? If you are not tracking your revenue, your bookkeeper will have a very difficult time calculating your profit. And if you are not tracking your expenses, your bookkeeper will have a very difficult time calculating your loss. Both of these figures will be important to you and they say everything about the overall health of your business. Thankfully, your bookkeeper can help. By creating a financial statement, your bookkeeper can help you better understand your business and measure its success.

Manage Payroll

Your bookkeeper can help calculate your payroll and in some cases, even manage employee benefits if you have employees. Depending on your industry, your payroll requirements can vary widely. If you own a restaurant, for example, payroll taxes will be high. If you own and run an insurance company, you may have a complex set of requirements. Whatever the case, your bookkeeper can help you manage payroll. During the process, they will help your business reduce costs and have a better idea of how much revenue each employee brings in. They also use this to help track that your business is making enough money to cover the costs of the employees you currently have.

Set Up Automated Systems

Your bookkeeper will be able to set up automation systems for some operations, if you perform a specific type of business. The system could help you track inventory and track customer orders. If you have a bar, for example, you will want to track how much liquor you order and how much you sell. In retail stores, you will want to track how many items the customers buy and whether they pay with cash or credit card. You will also want to track how long it takes them to pay the bill. That way, at a moment’s notice, you can tell what your inventory levels are and if you have the money to buy more when the supply dictates that type of purchase. Automation systems are useful for tracking inventory and managing customers.

Protea Financial Bookkeeper tasks

Track Your Performance

One task your bookkeeper can take on is tracking your performance. They will do this through regularly looking over the numbers of incoming revenue, outgoing expenses, and watching or knowing industry trends. Many bookkeepers have insight of when business will pick up based on the performance in prior years. The more tracking you have your bookkeeper do, the more insight you can gain into how to position your business for the best returns. You can ask your bookkeeper for advice on future decisions based on past performance, giving you an edge in your industry, too.

Keep Track of Your Inventory

Your bookkeeper will be able to keep track of your inventory if your business regularly keeps inventory records. Inventory records help your financial professionals keep track of your profits and losses. They let you know how much money you have in the bank and how much money you owe suppliers. If you don’t keep track of inventory, your bookkeeper will have a difficult time calculating your profits and losses and helping you manage your finances.

For example, if you own a winery, you need to track how many bottles you create, how many are sold, and how many you plan to allow to age for a deeper flavor. Knowing what type of inventory you have on hand also allows you to price your inventory properly. Asking your bookkeeper for insight as to which products have sold best and what their price points were can help you adjust your prices if sales seem stagnant or slow during certain periods of the year.

Dig Into Your Company’s Finances

Your bookkeeper will be able to help you dig into your company’s finances if you regularly perform financial analyses. Analyses let your bookkeeper figure out how much you should be earning and how much you can spend. This can be a tricky, complicated task. If you don’t perform financial analyses regularly, you could have a difficult time making sure you have enough money to cover your expenses and have a buffer for unexpected losses. Your bookkeeper can help you perform financial analyses to figure out how much money you need in the bank, how much income you should place into various investments, and how much you can spend when you need inventory or upgraded equipment.

Protea Financial Tax Documents Your Bookkeeper Can Help With

Help Get Tax Documents Ready for Your Accountants

In the course of helping you manage your finances, your bookkeeper will help you get tax documents ready for your accountants. Your accountant will need access to the documents you need for taxes each year. They will also need access to or copies of the documents you need to file your taxes. Your bookkeeper will be able to help you get all the documents you need ready for your accountant. You will also be able to relax while they do it. Accountants and bookkeepers regularly work together. They know what the other will need, ask for, or information that will help make their jobs easier. Let your bookkeeper and your accountant work together so that at tax time, you can remain stress-free while they work together to figure out all the details.

Turn to Protea Financial for Help Learning What a Bookkeeper Can Do

Your bookkeeper can help you become more efficient and effective in running your business. Whether you want to track inventory or manage payroll, your bookkeeper can help. They will also be able to help you with tracking your performance and getting your business ready for taxes each year. Bookkeepers can also help you dig into your company’s finances and help you make sound financial decisions. With a well-prepared bookkeeper, your business will be more efficient. To find a bookkeeper your business can depend on for these tasks and more, contact Protea Financial today. We are here to help!

Find the Perfect Bookkeeping Partner at Protea

Take the time to find a bookkeeper that you can trust to help with all the business tasks possible. You need to focus on running your business. Leave the numbers to your bookkeeper!