You need a business plan for three primary reasons:

• To show to bankers and potential investors
• To better understand your existing business structure
• To do short- and long-term strategic planning

Effective business plans contain multiple text documents, but it’s the financials—those charts and graphs and tables—that will jump out at potential loan approvers and investors. They’re also useful to you as you continuously assess your company’s financial growth.

Three reports are always included: Income Statement (Profit & Loss), Cash Flow Statement, and Balance Sheet. Some business plans offer additional ones, like a sales forecast and expense budget. These grow out of your assumptions, a lengthy list of questions you must answer, like:

• How many units will you sell each month?
• How much will you spend on marketing in the first 12 months?
• What do you have currently in assets? Liabilities?

How can you make your projections realistic while displaying your company’s strength in the best possible light?  Here are some suggestions.

1. Start with historical data

Unless you’re just launching your business, you have existing data you can use for reference as you’re creating your projections. If you’re already using QuickBooks, this will be a lot easier.

2. Look at examples

If you’re a new company and don’t have historical data, this will be difficult, as privately-held small and midsized companies generally don’t disclose their financials. You can still do market and industry research online for information that’s available to the public.

3. Broaden your knowledge

Think beyond the confines of your own company and even your surrounding geographical area. Pay close attention to what’s happening on the national level. What’s happening with the economy that might affect your industry? As economists make predictions, consider what impact they might have on you.

4. Include multiple years

You might make your first-year projections monthly and include a lot of detail. For the next 2-4 years, you could use annual figures.

5. Consider creating two sets of financial projections

You could build projections for both worst- and best-case scenarios.

6. Be realistic but optimistic

Don’t inflate your numbers. The trained eyes of investors and bankers will know when the outlook is too rosy. And it won’t help you do your own internal planning if you’re overestimating your company’s potential. On the other hand, don’t low-ball yourself. You want to look like an attractive prospect to outsiders, and you want you and your staff to be challenged. It’s a delicate balance.

7. Get company-wide input

If your business is big enough to have multiple employees or even departments, get them involved in the process, just as you do when you’re preparing a budget. Your staff may have knowledge and insight in areas that you don’t.

8. Keep it simple

Financial projections are very, very complex. Make sure, though, that they’re clear and easily understood.

The mechanics of creating financial projections can be daunting, especially if you haven’t worked with spreadsheets or accounting software. We have extensive experience here, and we can help you take on this difficult but necessary process. Contact us, and we’ll help you get started.

Do your employees know what’s expected of them in terms of the company money they can spend when they travel? If they don’t, you might:

• End up with unnecessarily costly expense reports.
• Risk exceeding projections in your current budget.
• Alienate employees if you don’t reimburse them for everything.
• Have more trouble with future budgeting and forecasting.

Finally, an expense policy can save time and keep things fair. It will allow you to approve reports faster, instead of guessing whether you approved a certain expense before or not.

For all those reasons, your company needs an expense policy. This should be a written document that lays out the expenses that employees can legitimately claim when they travel on behalf of your company. This is the best way to keep travel expenses down. If employees know ahead of time what the rules are, they’re less likely to spend freely.

What’s In An Expense Policy?

Your expense policy should define what constitutes business travel and who is eligible to claim expenses. You can describe your expectations here, too. For example, you may ask employees to economize as much as possible. What happens if they submit claims for expenses that don’t follow the policy? How long do they have to submit their reports and how quickly will they be reimbursed? What kind of documentation is required and how should this and the report itself be submitted?

You’ll want to put a dollar maximum on some of the items you list in the policy or limit expenses in other ways. For example, are employees ever allowed to fly business or first class? How much can they spend on dinner or for a hotel room? Consider also spelling out the rules on things like cash advances, vehicle mileage, cabs or rideshare services, and “add-on” flights. You might also list expenses that aren’t covered, like the mini-bar, hotel gym, and movie rentals.

Many unanticipated situations can come up during business trips. What do employees do if they encounter one? You’ll probably have to amend your document periodically to include new expense types.

Keep your expense policy as simple and accessible as you can. If it runs too long, employees are less likely to absorb it. You’ll need to build flexibility into it, since things cost more in some parts of the country than others.

Finding the Right Solution

How do you handle completed expense reports? Getting that data into your accounting system can require a lot of duplicate data entry if you’re doing your bookkeeping manually, and errors are likely. It’s easier if you’re using QuickBooks, and easier still if you add an integrated expense-reporting app. Some even help you manage approvals, check reports against policies, and handle reimbursement.

Contact us if you’re struggling with this financial issue. We can help you find the best way for your business to manage your expense policies and reports.

There is no element of running a small business that can be more complex than payroll processing. Furthermore, getting it wrong can be disastrous. Not only are your employees counting on you, but federal and state taxing agencies are watching you.

Outsourcing payroll processing to an outside provider can be a good solution. If you are considering that route, there are several things you should consider about vendors before choosing one.

1. How much will it cost compared to what I’m doing now?

This is probably the first thing that comes to mind, and the question has many components, including:

• The price of doing your own payroll. What costs do you currently incur? If you are doing it manually, staff time accounts for much of it. If you have automated it, how much have you spent on hardware and software and staff time?
• The price of penalties. Payroll errors are expensive, and they diminish trust. An inexperienced inhouse employee can be more prone to costly mistakes than a professional.
• The price of outsourcing. Payroll service fees are all over the map. There may be a base fee plus an additional charge for each employee or one price per pay run or some other combination of charges. Are there other fees that you should learn about upfront?

2. What do you know about the vendor’s reputation?

There are payroll vendors that are household names in the industry. This popularity can speak to their reliability, but they tend to be some of the most expensive options. The bigger the vendor, the less likely you will get personalized customer service. If you are looking at a smaller vendor, make sure to do some investigating online to learn about their history and their level of client satisfaction. Do they have experts who can ensure that your payrolls and related HR requirements will be handled in compliance with state and federal regulations?

3. Will the vendor be able to accommodate you as your business expands?

Most vendors will tell you how many employees their services are able to handle. Keep this in mind as you consider how your company may grow.

4. How does the vendor handle communications with clients?

How do you report each payroll’s hours and other compensation and deductions? Will you be assigned a dedicated payroll expert or team who you can call or text or email with questions?

5. What are the vendor’s deadlines for pay runs?

Are they willing to do off-cycle payrolls when needed and is there a charge? What happens if you, or they, miss a deadline?

Our outsourced payroll services use innovative technology and payroll specialists who have many years of experience working with small businesses in numerous industries. Our staff gets to know who you are beyond salaries and hours and deductions, and we provide personalized, comprehensive service that you won’t find from vendors who only process payroll. We can even assist when you need to add or change your employee benefit plans, or when other areas of your business need attention. Contact us, and we will be happy to answer any questions you might have.

QuickBooks Online is not simply a web-based version of QuickBooks Desktop. Yes, they’re both designed for small business owners, so they’re easy for non-accountants to use. They both help you create records and enter transactions so you can track your financial accounts, your income and expenses, and the products and/or services you buy and sell. They allow you to connect to online services like banks and payment processors. And their built-in features can be expanded by integrating with hundreds of add-on applications.

But there are many differences, starting with what you see when you log into QuickBooks Online or open QuickBooks Desktop. QuickBooks Online displays charts and other text and graphics that give you an instant overview of your finances. The desktop version’s home screen contains a combination of toolbars and menus and flow charts that help you find your way around the software.

Other differences include:

Accessibility

You can log in to QuickBooks Online on any device that has an internet connection. QuickBooks Desktop ties you to the PC where it’s installed.

Price

You’ll pay a few hundred dollars upfront for the desktop version, unless you choose the Plus or Enterprise subscription-based desktop versions, where the web-based edition requires a monthly (or annual) subscription fee.

Updates and backup

When you use QuickBooks Online, you always have the most current version, and it’s backed up automatically. Not so with QuickBooks Desktop. You have to install updates as they’re released and set up your own backup. And to get the latest features, you must upgrade your copy of the software once a year.

Multiple users

Each edition of QuickBooks Online allows a set number of users at no additional cost. If you use the desktop version, you have to buy additional licenses depending on the number of users you have.

Mobile and More

If remote access to at least some of your QuickBooks data is very important to you, you’ll find that QuickBooks Online more accommodating. Using QuickBooks Online’s mobile app, you can view and enter transactions, take photos of expense receipts, receive payments, and track mileage automatically, among other things. Where QuickBooks Desktop’s mobile app only allows you to take photos of expense receipts and only works with subscription-based versions of QuickBooks 2020 and newer.  The site also makes it easier to connect to your online financial institutions, import transactions, and monitor account balances.

Do you need to track jobs as well as customers? QuickBooks Desktop will better serve you in that regard as the job related reports are more robust to the reports available in QuickBooks Online. It’s also a more powerful, flexible inventory manager, and its Reminders feature is superior to QuickBooks Online’s task tracking. QuickBooks Desktop offers more comprehensive help files within the software itself, and it gives you more control over customizing the application’s settings through its Preferences options.

Before you decide which version would work better for you, you’ll have to ask yourself some questions about issues like your technology budget, the importance of the user experience, any specific requirements you have, and your support needs. We can help match you with the right version and get you set up with it. If you have any questions, please contact us or click here to learn more about our outsourced accounting services.

Did you resolve to pay bills on time in 2021? Do you have a plan to do that? If you are using QuickBooks, there are three ways you can use automation to help you achieve your goal: reminders, memorized transactions, and scheduled reports.

Set Reminders

If you have more than a handful of bills to pay every month, it is a wise idea to set Reminders in advance of the due date so you can process the payments on time. To turn these on in QuickBooks, you open the Edit menu and select Preferences, click on Reminders, then on the Company Preferences tab. QuickBooks displays a list of actions, some of which must be completed by specific dates (like Bills to Pay and Memorized Transactions Due). You can enter the number of days before the due date that you want the reminder to appear in your list.

Click on My Preferences in the same window and make sure to check the box for Show Reminder List when opening a Company file. You can always access the Reminders list from the Company menu, but this option will display the reminders list first thing when you open QuickBooks.

Memorized Transactions

Bill payment is a tedious, repetitive task. For the most part, you write checks or authorize payments to the same individuals and companies regularly. Some amounts vary and others may stay the same.

QuickBooks allows you to “memorize” vendor transactions. This is useful for recurring transactions to the same vendor. This feature allows you to save those transaction forms (I.e., bills, vendor checks) so you can call them up when they are due, edit the amounts as needed, and send them. You can even designate the transactions to be created automatically if the details do not change from month to month.

To create memorized transactions, you create a transaction such as a bill or vendor check and click Memorize from the top ribbon. QuickBooks gives you a few choices when setting up the memorized transaction.

• Add it to your list of Reminders so you can edit it before sending or forego that option.
• Add it to a Group of similar memorized transaction that you use.
• Let QuickBooks automatically enter the transaction if the amount is always the same, like a loan or rent payment.  

Scheduled Reports

If you have assigned bill payment duties to an employee, you can create a schedule to memorize and deliver two reports to him or her: A/P Aging (Detail or Summary) and Unpaid Bills Detail. You can specify an email address and date/time for the reports to be delivered.  If you have these two critical reports sent to both yourself and your employee responsible for bill payment, it is unlikely that you’ll miss a payment.

Scheduling reports takes some setup work in QuickBooks We can help with this if you are interested in setting these up.

We can walk you through any or all of these automated processes and answer questions you might have about your company’s accounts payable tasks. We can also help you explore other ways you can automate accounting tasks in QuickBooks.

If you’ve decided that it’s time to automate your company’s accounting procedures, you’ll find that there’s a lot of competition for your dollars. But there’s really no need to look beyond the market leader, QuickBooks. Millions of small businesses use it.

QuickBooks’ popularity isn’t the only reason you should consider it. If you look at the reasons it’s a household name, you’re likely to discover why it’s the first choice for so many. Here’s why it’s become the Microsoft Word of accounting software. QuickBooks:

1. Is time-tested.

The desktop version was introduced nearly 30 years ago.

2. Is multi-platform.

You can choose between a desktop version that you pay for upfront or an online version that is subscription-based.

3. Was designed by accountants for small businesses.

You don’t have to have a deep understanding of accounting to use it, since the complex bookkeeping goes on in the background.

4. Works like other software and websites.

If you’ve used other productivity applications, you will recognize the user interface and navigation conventions it follows.

5. Is generic enough that it can be used by a wide variety of small businesses.

While every business is unique, QuickBooks provides tools that allow any company to:

• Keep track of customer, vendor, and product/service records.
• Manage income and expenses.
• Create and send sales and purchase forms like invoices and purchase orders.
• Pay bills.
• Run payroll.
• Generate reports that give them instant overviews of their finances.

6. Can be tailored to meet more specific needs.

Both versions of QuickBooks are exceptionally customizable. If you need more tools in a specific area like inventory or billing or payroll, for example, you can choose from hundreds of integrated add-on solutions.

7. Helps you track down the smallest details.

When you need to find a specific transaction or customer email address or the payment status of an invoice, you can do so quickly and easily.

8. Minimizes duplicate data entry.

Once you’ve entered information once, like a customer’s address or the price of a product or service, QuickBooks remembers it, so you never have to type it in again. When you’re creating a sales receipt or invoice, for example, you can select the customer’s name and the item you’re selling from lists of records you’ve already created. QuickBooks fills in the blanks with information about pricing, sales tax, discounts, etc.

This automation:

• Saves time and money.
• Helps prevent errors.
• Keeps your financial books consistent.

QuickBooks automates so much more of your tedious bookkeeping tasks. It can connect and download transactions from your financial institution. For example, it can remind you when invoices are due (or overdue), tell you when bills need to be paid, give you a heads up when it’s time to run payroll, and show you in an instant what your current profit or loss is, how many invoices are past due, or what the balance of each of your accounts is. If you’re ready to get started, contact us. We can help you set up QuickBooks to fit your business.