Your Home Business Tax Deductions

If you operate your own home business, then you are probably aware that there a few drawbacks to being self-employed, just as there are a few drawbacks to any major decision you do in your life.

Being an entrepreneur and self employed often means that you lose some workplace benefits, such as group insurance, sick leave, paid vacations, etc. However, the government does provide solace balance to those who have an entrepreneurial spirit, and this solace comes in the form of tax breaks, because you the home worker small business owner, are the largest source of employment in America.

There are many possible tax deductions for home businesses; you simply have to be well-informed about them to make use of them.

There are good reasons for you to go through the trouble? Because you?ll earn more money that way. By knowing all the possible tax deductions, and more, that you can take, you?ll come away with more of the benefits that your business generates, instead of getting cleaned out by the government. When it comes to taxes, make no mistake about it ? knowledge is power. The government needs you to have this power to keep it working also so they will help you when they can.

If you run a home business, some of the possible tax deductions for you are:

Home office costs, such as those that involve office repairs and maintenance. Expenses racked up through janitorial services, for example, when shown to be needed by the business, are deductible, as are waste management and garbage disposal services. Business furniture and equipment may also qualify for deductions in their year of purchase, as long as the amount does not exceed a certain limit.

Utility costs, such as electricity and water. The deduction applies to those areas that are used regularly and exclusively for business.

Telephone costs. This only applies if you have a separate line for use in business. A single line that is used for both business and personal calls does not qualify. However, if you make long distance calls and/or incur fax transmission fees, those expenses are deductible no matter which type of phone you use. You need to make honest percentage estimates of how much is used and keep good records based on your bills.

Rent or lease payments. A percentage of your rent, lease, or mortgage interest payments can be deductible provided that you are using the property regularly for business purposes.

Employee wages and employee benefits. If you are an employer of labor, you can deduct a portion of your salary and benefit expenses. Employee education and training costs are also deductible.

Education costs necessary in your line of work. This applies especially to professionals. Those who need continuing education to maintain their expertise may deduct the cost of this education from their tax returns.

Real estate taxes on business property. A portion of real estate taxes are considered deductible by the IRS.

Personal expenses. Some personal expenses, when conducted in conjunction with business affairs, are deductible. A portion of your automobile expenses, meal allocations, and travel and entertainment cots may qualify for deduction, as log as they are related to your business.

A final reminder: Try to maintain as accurate records as is possible. Document your deposits, income, expenses and deductions. This way, you will have proof validating your tax deductions. Because tax laws are complex and often changed, it is often advisable to consult a professional. This will allow you to claim as many possible tax deductions for home businesses as you can. Keep a stenographers notebook with separate pages for every deduction you feel you might have coming. Even if you don't know if it is a deduction, for now, record it.

The above is very powerful. If you think something might be a deduction, write it in your notebook.

Have a CPA do your taxes for you. They cost more but you will get more back and have less trouble with the irs.They will find deductions you did not know you have coming from your possible list of deductions and they will also take off deductions you do not have coming. Some things they will be able to carry over for years in the future.

Your CPA will give you tips that will save you time and money and make your business better. They have software that will make your tax work far more efficient. If you get called in for an audit your CPA will do all the talking and you say nothing. I let the IRS call my CPA, regarding my taxes, if they have any questions.

You are less likely to get audited directly by the IRS because your CPA has a reputation to keep up and will keep your taxes straight. You will even save the IRS some money because they know your CPA will do better tax work than you.

Overseas tax services cannot go to an audit with you. This is a very important benefit of a CPA for you. Even though their charges are less they cannot know your business as well as your CPA to help you with many problems and questions. Buy Americans when it comes to taxes.

If you are going to be an entrepreneur the CPA will serve you better than an automatic tax software program and yes the software programs will result in mistakes. By the way, I am not a CPA or trying to sell you any tax services.

references; irs, cpa and 40 years of tax record business experience

 About the Author
James M. Lowe writes original articles, press releases, e-books, blogs and websites about home business opportunities. contenttomarket.com

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Accounting Degree Benefits for Businesses and Firms

Now that you've finished your studies you are looking for accounting degree employment. Theoretically, you should not have too much trouble in this search. There are many unorganized businesses out there which could use a professional accountant. A certified public accountant does just that: keeps track of financial transactions and records in the business.

The majority of business owners ask themselves if they should hire an accountant or not. Having an unorganized business is not an option, because that would lead to bankruptcy. Of course there is also the possibility to use an accounting software, but not anyone can use that either. The best thing to do is to look for a person with an accounting degree.

The first obvious choice for a business owner would be to look for a professional in an accounting firm. This has the advantage that you can find accountants who are well trained and experienced. This is not mandatory though, and you can as well hire an accountant who works on his own. This should be your own decision based on what type of accounting job you need.

How can one become certified public accountant? In America, you need to meet a few requirements, as in most of the countries worldwide. Usually, you need about 150 accounting college hours. You will also have to pass an exam. But this is only if you want to become a certified public accountant.

If you, however, are at the other end of the deal, meaning a business owner, you have more than one option when hiring an accountant. You can do it as a long term arrangement, or, as some business owners do, with the only purpose of him paying the taxes. But why hire a professional accountant with the sole purpose of paying taxes?

The answer is simple. Accountants are the ones who know best how to increase business deductions and maximize profit. You could be familiar yourself with some of these procedures but accountants are those who know them all. In the end, it's your choice whether you permanently want to hire an accountant, hire one for short periods of time, or even learn accounting yourself.

If you decide that you want to hire an accountant make sure you check his qualifications. You can work with a local accountant or look for one in an accounting firm.

Whatever you decide, you have to make sure that the respective person has an accounting degree. And hiring a professional to keep your financial situations in order is a very wise thing to do. You need to have the correct tax returns if you want not to get in trouble with the law. After all, there are many professionals out there who are looking for accounting degree employment.

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The Facts About Accounting and Accountancy

Oftentimes when I meet someone for the second or third time, they say, arent you in accounting? While I am into accounting, which is the methodology and measuring aspect of my work, the profession as a whole is better labeled as accountancy.

Accountancy is the profession and accounting it the methods by which accountants measure, track and report on financial information so that resource allocation decisions can be made by, well, whoever the decision makers are.

For a small business owners personal finances, as an example, I may be measuring the finances of a few people (the family), and reporting the necessary information to the small business owner. In this situation, the decision maker is the small business owner and his decisions involve deciding how much money he has to put toward family necessities.

Generally speaking, there are two main types of accounting. There is financial accounting and there is auditing. Financial accounting typically involves processing of financial information about a business operation where information is recorded, organized, summarized, interpreted and finally communicated.

Auditing, on the other hand, is there process that an independent auditor examines accounting records and financial statements so that he or she can express a professional opinion about the financial records and answer questions about projections.

At the heart of accountancy lies the need to take stock of the day to day state of various sales and expenses. In the modern world when many contracts are partially fulfilled at varying times, bookkeeping is the only way to know where you and your business stand in the greater scheme of things.

If you operate your own small business, you may be able to do just fine with some accounting software. Take a look around for some flowchart templates. These can make monthly financial recording and reporting, dare I say it, fun. Simply enter in the various types of income and expenses, then each subsection updates the appropriate fields. Before you know it youve got proof that all bills have been allotted for and youve got your bottom line.

If you find you can manage your business finances on your own, then, by all means, stick with the system that you know works for you. If, however, you start running into complications that make it hard for you to see where discrepancies are coming from, it may be time to enlist the services of a professional accountant.

Talk with colleagues and friends. You may know someone that knows a tax accountant or other type of financial consultant who may be willing to look over your taxes for a friendlier rate than if you were to cold call them. 

 About the Author

T J Madigan has been established in online business since 1998 and is director of a number of successful online projects one of which is articles.net.au.

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Sarbanes-Oxley Act And Other Measures Against Accounting Scandals

In the wake of the corporate scandals like those at Enron, Tyco International and WorldCom that ripped apart the financial interests of thousands of shareholders and retirement plan investors, lawmakers and professional bodies decided to tighten the grip on financial reporting norms.

Sarbanes-Oxley Act is the response to the malicious accounting practices that had been going on before. It seeks to restore the public's confidence in the corporate governance ethics and financial reporting guidelines.

If the public's trust has been shattered it is an issue of concern especially as all along there had been as assurance of sound accounting and auditing practices. The Sarbanes-Oxley legislation establishes new standards for all US public company boards, management and public accounting firms.

Some of the main provisions of the Act are:
A new agency, the Public Company Accounting Oversight Board, shall monitor the role of auditors of public companies.
Henceforth, CEOs and CFOs shall certify that the financial reports are true and fair.
Stringent measures to establish greater auditor independence including bans on certain types of assignments and prior certification by the company's Audit Committee of all other non-audit work
Listed companies should have fully independent audit committees to review auditor-client interaction
Significantly longer jail sentences and heftier fines for corporate executives guilty of willful misstatements

Protection to employees providing information to OSHA within 90 days, to claim reinstatement, compensatory damages, back pay and benefits and reasonable costs.

The professional regulatory bodies have also embarked on a thorough exercise of revamping the auditing guidelines and acceptable accounting practices. It is not as if the auditors colluded with the perpetrators. But, insufficient mandate for making disclosures of certain types of transactions could have led to slippages despite the diligence and due care of the auditors. 

A famous judge commented," Auditors are like watchdogs; they are not bloodhounds".

The disclosure requirements mainly equip the auditors to report whether there have been shady or questionable transactions.

Therefore, disclosures are an integral part of the financial statements. They provide additional information on transactions that could have significant bearing on the understanding of the information contained in the statements. Disclosures also predicate that chief executives of corporate bodies apply the GAAP in preparing financial statements.

Common forms of disclosures are:
Additional information on account balances in the financial statements, primarily with respect to transactions with top management or their relatives
Supplementary tables and schedules
Financial impact of certain decisions

The main agencies that frame the disclosure requirements are the FASB, SEC and the IASB.

 About the Author
Sam Kern has also published a number articles on Accounting and Income tax recurns: topincometaxreturns.com

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Select The Accounting Software That Suits Your Needs

Like any other product, you can pay for it or you can take it for free. The great majority of the free accounting software products is not very complicated and is easy to use. Although they are not suitable for large companies, they can easily be used by small businesses, because they focus on simple accounting. Many people say that with free accounting software they can perform the same tasks as with a paid version.

Anyway, either paid or free, you need to choose your accounting software correctly, a thing which, as it was mentioned earlier, can be a quite difficult thing. Here are a few pointers that should cheer you up a little bit and help you find the best solution available for you:

1. Think about and write down your needs. What's the main objective of your company? Do you plan on making it a big one?

2. Don't get carried away by product reviews, recommendations from friends, although you should consider them. First and foremost though, you need to concentrate on what's suitable for YOU;

3. Don't consider only the first few highly rated products;

4. Write down a list with all the available pieces of software. Carefully thinking about your needs, your available budget and their specifications, rule out the first few which clearly don't fall into your preferences from the start;

5. By now, you should have narrowed down your list to about 2 or 3 products that meet your demands. Make your final decision by re-checking all of their features and making sure you check out all the other available products for that specific price. Usually, it's best if you decide on a product made by a known company, rather than a more obscure one. Although it's sometimes wrong to judge by that, sometimes it's plainly safer.

Also, you may hear about a growing number of companies which are developing and providing free accounting software for marketing campaigns. Don't discard such an option and pay attention to everything, as you may find a pleasant surprise among those products. After all, what do you have to lose if it's free?

Still, a recommendation would be that it is always best to simply test the trail version, if you ever consider downloading free accounting software. It is the best way to see whether it suits you or not. This is because you don't have to commit yourself to anything, and if you decide to try another one, you can simply search for it until you find the right demo for you.

So which one is going to be your option? Whatever you should finally decide upon, remember to patiently look for the right option for you. Take into consideration the nature of your business, your plans with it, its domain of activity and all the other variables. If you do all that, you will be able to find the accounting software that best suits your needs. 

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Forensic Accounting- CSI of Accounting Jobs

Forensic accounting is one of the fastest growing areas of accounting jobs in the market today. This specialized area is interesting and dynamic, and provides unlimited opportunities for the next few decades.

Forensic accountants work in two primary areas, investigative accounting and litigation support. Investigative accounting encompasses not just the numbers and documents of a company, but the business environment as well. Forensic accountants investigate the financial operations of an enterprise and prepare information that may be used in a criminal or civil court case. Forensic accountants provide investigative services or provide support for litigation.

Forensic accountants will often spend time at the business they are investigating, collecting and analyzing financial data. Most of this analysis is done on the computer, so good computer skills and knowledge of software is essential to this position. The forensic accountant will collect evidence and documentation that may be used in a courtroom proceeding, and will prepare reports to be used the management of the company being investigated, parties to the litigation or law enforcement agencies. Often, the forensic accountant will be required to testify in court or provide depositions as to their findings.

Forensic accountants are employed by a variety of companies and agencies. Many law enforcement agencies have forensic accountants on staff to assist with criminal investigations. Often, these accountants follow the money trail to help track and prosecute a criminal. Many CPA firms have forensic accountants on staff, and more firms are specializing in forensic accounting to assist with shareholder and partnership disputes, business loss, fraud or employee theft investigations and professional negligence issues.

Other forensic accountants work for or with insurance companies to investigate business interruption and other types of claims. Forensic accountants routinely work for or with law enforcement agencies, lawyers, insurance companies, business owners and government agencies. 

About 40% of the top 100 accounting firms in the United States now have a forensic accounting department, and the field is expected to be one of the top 20 job markets in the next few years. How do you become a forensic accountant? A bachelor's degree in accounting is required, and most are already certified public accountants (CPA's).

Additional coursework in areas like law enforcement and criminal justice is usually required, and some legal training is helpful. You may want to pursue a accreditation as a certified fraud examiner (CFE) from the Association of Certified Fraud Examiners. This is a nationally recognized accreditation similar to the CPA designation.

Entry salaries in this field range from upwards of $30,000 to $60,000, but experienced forensic accountants often exceed $100,000 per year and more. So, if you are looking for a lucrative, interesting job with plenty of upward mobility, consider forensic accounting. With almost unlimited growth for the next few decades, it's an accounting job with great potential.

 About the Author
Jay Moncliff is the founder of accounting-center.info a website specialized on Accounting Jobs, resources and articles. This site provides updated information on Accounting Jobs.

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Accounting And Quasar Software

Businesses operate under extremely competitive circumstances. From the small business to the transnational corporations, all seek greater profits and cost competitiveness. With wafer-thin profit margins and shrinking market share, businesses can survive and grow only with constant reduction in costs. Growing complexities in accounting mean one has to adopt technology to function efficiently. There are a number of accounting software packages. Quasar is an excellent package.

Why do we need accounting software? Because, the capabilities of the accounting system of an entity should be geared towards providing better flow of operations and reporting mechanisms for control purposes. The basic functions of accounting like bookkeeping are addressed well by Quasar. Besides generating the payment, receipt and transfer entries for cash and bank, there are a number of modules that help in management reporting. The most interesting is its inventory control module. All versions of Quasar offer comprehensive inventory controls.

The module allows tracking the location and quantities of all inventory items. Beyond the simple operations, the software allows inventory management for in-house assembled products. Manufacturing companies often assemble kits using raw material components from the inventory. With Quasar, when the components are removed for assembling kits, the inventory of components is adjusted suitably. It also allows grouping of items into various categories and nesting of groups into various levels. Stocks falling below the reorder level can be replenished with automatic vendor purchase orders. Costs and selling prices can be pre-set and discounted in a number of ways. Mark up and sales figures can be easily extracted.

Sales invoicing and purchases management are the main strengths of Quasar. Customer quotes are easily converted to final invoices. Adjustments for promotional schemes and discounts can be formulated depending on period, customer profile or store location. Margins can be analyzed item-wise, customer-wise or salesperson-wise. Similarly, purchase orders can be cross-checked with vendor invoice. There are several payment options including printing a check. Miscellaneous fees such as container deposits, freight charges and franchise fees can be monitored.

Quasar has an intelligent design that allows friendly user interface to facilitate quick and easy data entry. Some accounting programs do not optimize keyboard use. They depend on selection of frequently used options through the mouse. This can be a somewhat time-consuming manner of working. Quasar's menu options are accessible through the mouse but the interface allows for development of keyboard shortcuts. Thus, data entry is speeded up saving a lot of time in the long run.

 About the Author
Sam Kern has also published a number articles on Accounting and Income tax returns; topincometaxreturns.com.

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Tips On How to Make Profits Online

It is not just enough that you increase your sales or area of operations. You need to know whether you are actually making a profit or not. If you do not do this exercise, you will not likely judge whether your business is successful or not. Moreover, keeping track of your profit is the best way to measure effectiveness of other functions like production planning, marketing, advertising, etc. There are many instances of businesses that did high volume, but lost their advantage because they ignored adequate profit planning. For small businesses especially keeping constant track of the profit plan is the best way to increase competitiveness.

So, we repeat again that the gross revenue is not that critical as the net profit is. You need to know what eats into your profits and how you can plug it.

The best way to keep track of your profits is to make a financial plan and measure actual performance on a periodic, preferably monthly basis. This allows you to detect problems early and correct them quickly.

Here are a few surefire strategies:
Make a realistic financial plan. This means put down in money terms how much revenue you project for the period. Factor in the corresponding expenses.
Install a suitable accounting process that records the transactions in a timely and accurate manner. Always set aside some time to review your accounting transactions. This prevents frauds.

Remember that time and money lost can never be recovered. At best, you can only recast your projections and work towards a more achievable target. This approach however does not allow for risk-taking. Therefore, a plan that combines aggression with pragmatism should be followed.

Analyze the loopholes and plug them right away. If your sales have not increased as expected, consider efficiency of marketing staff or effectiveness of the marketing strategy. Remember, accounting profit does not occur out of the blue. Make team work the cornerstone of business success. Brainstorm for ideas on improving efficiency and cutting down costs.
Always do a complete cost benefit analysis for any investment. Extra outgo for the purchase should be more than matched by sales inflow.

Increasing your profit should be the motto. Therefore, attempt measures to improve profit through reduction of costs or better utilization of resources. If your growing revenues were just about matched by soaring expenses, you would soon go out of business. Higher dollar inflow from sales should actually translate as higher dollar for keeps as profit.

 About the Author
Sam Kern has also published a number articles on Accounting and Income tax returns; topincometaxreturns.com

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The Accounting Profession

All of us need to grapple with accounting whether we like or not. From managing your personal finance to running a corporation, there is no escaping accounting. It might seem very complex and overwhelm a novice. The complexity is only with respect to practices and presentation. The principles are fairly simple and guided by common sense.

The purpose of all accounting is to ascertain whether the business made a profit or loss or whether its assets have increased or not. This is possible only when accurate information about the revenues and expenses are recorded, classified and compiled. Thus, accounting is concerned with tracking inflows and outflows.

The most common perception of accounting stems from the financial statements of businesses. These statements are only a culmination of the accounting processes. Accounting plays a much larger role that of assisting in managerial decision-making.

There are several elements of accounting in a business. The basic step is of course, book keeping. This is concerned with recording the transactions and preparing the periodic books and journals. Another aspect of accounting is the preparation of final statements or "financials". These financial statements disclose information about the performance of the business. These figures are audited and tax returns are prepared.

Besides the management and the taxman, there are others too that need accurate financial statements about the business enterprise. In the case of corporations, the stockholders, sometimes thousands of them, are the owners who gauge the efficiency of the board of directors only through the financial statements. Lenders or creditors are also interested in learning about the earnings of an enterprise and its ability to meet regular payments before advancing a loan or line of credit.

Accounting records form the basis for several internal statements used in Management Information Systems. That is why, all managers need to have adequate knowledge of accounting principles. The GAAP or Generally Accepted Accounting Principles represent the codified wisdom that seeks to make accounting statements comparable and standardized. Because accounting is concerned primarily with monetary values, accounting principles closely follow the elements of consistency, accuracy, historical cost measurement and appropriate classification of capital and revenue items. Accountants spend much of their time in ensuring that the accounting processes comply with the GAAP.

Accounting offers a challenging and satisfying career avenue. Educational requirements of the profession range from a graduate degree to qualifying as a Certified Public Accountant (CPA). Society looks up to CPAs as the custodians of high ethical standards of reporting and accounting disclosures. They are independent professionals and are popularly called auditors. CPAs are mandated by law to conduct audits of certain types of business enterprises notably joint stock corporations, not-for-profit entities and so on.

If you choose to work as an accountant you could rise up to become the Chief Financial Officer with a number of controllers reporting to you. The main areas of focus for controllers are cash or treasury management, capital budgeting and taxation. With organizations going global, working in industry is surely a high-adrenalin situation.

Teaching and research is also a viable alternative and you could be a forerunner for developing the theoretical basis of accounting to keep pace with changing economic scenario. The domain expertise of the accountant is essential for developing advanced software for accounting, enterprise resource planning (ERP) and so on.

 About the Author
Sam Kern has also published a number articles on Accounting and Income tax returns: topincometaxreturns.com

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Final Statements

Accounting does not end with recording transactions. The owner or the management needs useful information about whether the business made a profit or loss or how the financial position at the end of the accounting year compares with that at the start.

From the trial balance all the income and expense items are transferred to the income statement. Further, certain other items are also adjusted before transferring the balances. Consider rent. Now, rent becomes payable at the end of a month. Therefore, following the accrual principle the accountant posts the rent as payable outstanding and adds this amount to the rent expense. The rent payable appears as current liability in the balance sheet and squared off when the actual payment is made.

Similarly, insurance payments are made annually. But, they would not match the accounting year. On the date of the preparation of final statement, there could be some months of insurance remaining prepaid. This amount is deducted from the expense and shown as current asset in the balance sheet. It becomes expense for the next accounting period.

The excess of income over expenses represents profit while the reverse scenario would mean loss. Profit adds to the equity or owners' capital while loss erodes the same. In effect, profit means the assets have increased while liabilities have decreased. Loss means assets have decreased and liabilities have mounted.

To find out the exact position of assets and liabilities, the accountant prepares the balance sheet. Although one would know whether the business made profit or loss or the value of assets and liabilities have increased or decreased, there is a need for a statement that gives complete information about how the financial position was achieved. The Cash Flow statement serves this purpose.

The basic rationale behind the cash flow statement is that all operations of the business are connected with receiving and paying cash. This is also called the cash-to-cash cycle. The firm buys inventories, sells them, incurs expenses and pays off the dues. So, there is always a parallel run between the firm's debtors and creditors. There are also transactions like fresh infusion of capital, paying off loans and making investments.
Therefore, to get the correct picture about how the firm's operations and other non-operative items contributed to the changes in financial position, the cash flow statement is useful.

The starting point for the cash flow statement is the balance of cash at the start of the year. There are three segments in the cash flow statement: Operating, Investing and Financing. For the first segment, we knock off non-cash charges like depreciation and loss on sale of assets to derive the operative profit in cash terms. We also adjust the net increase or decrease in all current assets and liabilities except cash. In the second segment, we include the investments in fixed assets or financial instruments. In the third segment, we show the dividend or withdrawal of capital. The net effect of all the three segments is adjusted with the opening cash balance to get the closing cash balance. 

 About the Author
Sam Kern has also published a number articles on Accounting and Income tax returns; topincometaxreturns.com.

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The Nitty-Gritty Of Accounting

Accounting is as ancient as man's attempts to transact with fellow human beings. With the predominance of money measurement in economically useful activities, accounting became the most vital tool. At the center of all accounting principles is the urge to ensure accuracy and consistency. This takes the form of double entry system of accounting. The 15th century Italian mathematician, Frater Luca Pacioli, first extolled about the features of the system.

Double entry method offers a convenient and accurate format for recording transactions. Put simply, all transactions have two aspects. Therefore, omissions or numerical errors would automatically stand out. Thus, it acts as a self-correcting mechanism.

The basic aspects of accounting relate to correct classification of transactions. There are four major accounting heads: assets, liabilities, revenues and expenses. At any given point of time, the firm's assets should equal its liabilities. This is the accounting equation. If they do not match, there is an apparent error in the accounting process.

The enterprise's assets represent the productive resources used by it. Plant and Machinery, building, stock of raw materials and stores, debtors or accounts receivables, cash and bank balances are some of the assets. Liabilities are the sources that finance the assets. Owner's capital, long-term loans, short-term bills, sundry creditors and other financing are the liabilities.

When revenues exceed expenses, the firm makes a profit and in the reverse it is a loss. Ultimately, profit or loss reflects in the financial position or the values of assets and liabilities on the given date. An increase in assets or decrease in liabilities means profit and decrease in assets or increase in liabilities mean loss.

Profit is the driver in any business enterprise and no wonder entrepreneurs seek to maximize it. More critical than profit is the measure of profitability because the latter reveals the firm's efficiency in utilization of financial resources. Return on Investment is the most common profitability ratio. The claim over profits of a business depends on the organizational type. In ownership or partnership firms, the owner or partners have total claim over the profit. In joint stock companies, the stockholders are entitled only to the dividend as declared by the board of directors.

The work of an accountant is crucial as he reports the performance of the enterprise to the management and the owners. Based on the figures supplied by him, important decisions like capacity expansion, make or buy, retaining or hiving off unprofitable lines of business and employee incentive computation are taken.

 About the Author
Sam Kern has also published a number articles on Accounting and Income tax returns; topincometaxreturns.com

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Companies House - How to beat Company Identity Theft

The recent increase in media interest in personal identity theft has provided a reminder that company identity theft at Companies House is still a major problem for UK limited companies. These companies are being encouraged to proactively take action to deal with company filing fraud at Companies House. There are over two million company records held by Companies House which currently reports that of the five hundred thousand documents filed at Companies House each month, including company accounts, approximately fifty are identified as false.

Company hijacking at Companies House can involve:

The company directors are changed - Fraudsters file change in company director forms 288 to notify Companies House of a change to the company's officers. These will either be stolen identities of real people or completely fictitious individuals pretending to be a company director. They will also notify Companies House that the company's true officers have all resigned.

The companies registered office is changed - Fraudsters file a form 287, signed by a bogus company director, to change the company's registered office to an address of their choice at Companies House. Once this is done, any communications from Companies House will be sent to the company at the new registered office, ensuring that the company itself doesn't receive notifications from Companies House of any future changes.

Supporting documentation may be obtained - The fraudsters notify Companies House and effectively have the company under their control as far as third parties are concerned, as they appear to be the legitimate company directors. In order to give credibility in their subsequent dealings with third-parties, the fraudsters may request, for example, a Certificate of Good Standing from Companies House. This official document then confirms the status of the fraudsters as being the company directors.

As far as third parties are concerned, the fraudsters appear to have gained control of a company and appear to be the geniune company directors. This can include obtaining supporting documentation from Companies House and then approaching suppliers of high value, easily disposable, goods and placing orders apparently on behalf of the company, with delivery being made to the company's "new" bogus registered office, which the fraudsters can obviously access.

In another case, the owner of a business was surprised to discover that the registered office of his family business had been changed from the address at which it had been located for the last hundred years. Even the company's nameplate was stolen from the building where it was located.

Since April 2005, identified instances of company filing fraud seem to have leveled off below the peak, but are still at a relatively high historical level of approximately fifty incidents a month. The Metropolitan Police agree that a single filing fraud could cost £1 million and could very seriously damage the victim business.

One large part of the fraud is that the company itself doesn't discover the changes at Companies House until the fraudsters have had time to complete their scam and then disappear.

Other frauds include setting up bogus companies, falsely adjusting company accounts and even stealing the identity of the auditor to ensure that these company accounts appear to be credible. A credit agency has recently revealed that nine auditors have had their details taken to approve a false set of company accounts over the last nine months. Another hundred sets of company accounts have been set up using completely fictitious auditor details over the same period.

Companies House now offers a protected on-line filing scheme (PROOF) where only mutually approved documents, including company accounts, are registered. Companies are also advised to use an online monitoring service advising companies each time a change of record has been made.

It is highly likely that the new Companies Act will create a new offence under which a person who knowingly or recklessly delivers or causes to be delivered to Companies House a document, including company accounts, that is misleading, false or deceptive in a material particular, will be liable to imprisonment for up to two years, or a fine, or both.

 About the Author
Phil Smith is the managing director of creditgate, one of the UKs leading and fastest growing online providers of business credit and company information. Before setting up creditgate.com two years ago, Phil was previously employed for over 20 years within the insolvency department of Pricewaterhousecoopers.

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Accounting outsourcing is here to save you from tax related problems

Are you stuck up with the overload of work related to tax calculating? Then it is the right time to opt for outsourcing services that are being offered to accounting firms. Everybody likes to lessen work burden because you have to pay attention to each and every part of your task carefully. With the excess of workload, you may make mistakes that can drive you towards losses. And nobody is here to make losses, rather to earn huge amounts of profits in the field of business. The concept of accounting outsourcing is all about giving some part of your work or the entire one to an outsourcing company that will do the best work for you.

Everyone is aware of the fact that accounting outsourcing saves a lot of your money. Mainly, it is because of this reason that the outsourcing services are frequently sought after. As far as outsourcing is concerned, the saved money can be invested to boost any other department of your business that is on the losing end. Many a times, it happens that the accounting firms suffer huge losses due to their inattentiveness to other sectors of the business. In this case, accounting outsourcing proves to be a boon for your business.

Accounting outsourcing ensures better quality of service. It is because the firms that are handling outsourcing services concentrate thoroughly on the accounting work only. Many accounting firms or big business houses outsource various accounts related tasks, such as invoice generation, generating accounts, financial statements, trial balances, profit and loss account, pay roll processes, checking credit card accounts and lots more. Outsourcing is highly beneficial for you as it saves money that would have been wasted in hiring a proper staff for managing such accounting tasks.

The accounting outsourcing companies understand the need of getting things done at a faster speed. Such outsourcing companies are a blessing in disguise for those accounting firms and big business houses that are unable to manage their work. You can even monitor your work done by your outsourcing helpers. The information can be posted to the server in your company and this will let you keep a track of the efficiency and quality of work. The main aim of this service is to save you from problems that may crop up during tax sessions.

Tax session is the ultimate time that everyone gets tensed. It is because, if you are not able to file the tax on time; you can land up in big problems. Mainly because of this reason that outsourcing services are seeked from the other companies. Accounting outsourcing service has become mandatory for the over-burdened accounting firms. The professionals with outsourcing companies are skilled enough to manage the tasks properly and complete the work on time. After all, they understand the need of making good client relations.

 About the Author
Allies Harbor is a writer for ifrstaffing.com - IFR Staffing offers services for Accounting outsourcing, India outsourcing accounting, Data entry outsourcing, Data entry Services. You can have benefits of Software outsourcing, Outsourcing Seo Services.

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Payroll Outsourcing Choices

Outsourcing of payroll processes simply means that you transfer this traditionally in house function to another company. All of the tedious duties involved with payroll processing are shifted from the company itself, allowing more constructive use of staff time.

Once a firm entrusts its payroll processing to a reliable outsourcing company, they can be assured that not only will all the payroll be taken care of, but expert advice will also be available. The costs of setting up your own payroll systems, which include software purchasing, maintenance and upgrades is avoided. Using payroll processing outsourcing avoids many issues such as penalties, salary calculation errors and claims.

There are many payroll processing outsourcing firms to choose from. Make sure the company you decide to work with has the right experience in your locale and that their references are impeccable. A company can make a comparison of the methods of various vendors.

In addition to payroll processing, payroll outsourcing companies will provide the necessary accounting reports. Accounting data can be very tedious for companies to put together. In addition, there is a certain amount of risk around accounting reports since audit usually uses such reports. The last thing you want to take a chance with is messing up your audit data and getting yourself in trouble in that arena. Outsourcing payroll services added that extra benefit and piece of mind that your accounting data and reports is accurate. Outsourcing payroll services provides this extra piece of mind. All data time capture and entry must be documented, and the company should provide round the clock help for employee assistance.

The lure of an economic solution for a tedious and time consuming chore should not be over shadowed by carelessness. It is imperative that the provider of these services can provide the maximum security to its clients through the use of encryption technology and password protection.

There are so many attractive benefits besides costs savings of payroll processing outsourcing. Increased productivity, employee satisfaction with online assistance, avoidance of late taxes and penalties are just a few additional benefits that add to the attractiveness of payroll processing outsourcing. Best of all, a company may avoid going out of business by incurring a cheaper, more efficient system of operations through outsourcing. What better benefit could there be? If a companys competitors are outsourcing do to cost reasons, most likely they should outsource alos to ensure they can stay in business and compete. 

 About the Author
MJ Batta writes job outsourcing related topics, special outsourcing report and hosts a job outsourcing research site at outsourcing-american-jobs.com.

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Managerial Accounting and Business Growth

If you are in a growth mode, perhaps your business is only a few years old and you are trying to establish yourself in the local market, then your measurements will focus on growth.

Before you can measure your growth you need to be clear about where you are now and where you hope to go. What size is the market? Have you targeted a certain geographic area? Or perhaps a certain channel, like hair salons for your handmade moisturizing products.

Whatever the growth goals are, you can develop a system for tracking your progress. Let's take a look at Carls' Candles and the managerial accounting system he has developed to measure his growth.

Carl has been making container candles for three years now. At the current prices Carl has been able to increase sales year over year. But the growth rate has slowed and last year he only grew his sales revenue by 5%.

The market for container candles is growing and the distribution outlets are numerous. Carl has been marketing his candles direct by selling through independent retailers and small gift shops in the area.

Carl sells to the retailers at $3 per candle. The direct costs for each candle are $1 and the overheads are $4,000 per month. In Carls' overhead budget he includes his own wages, electricity, and insurance. The direct costs include soy wax, containers, fragrance, wicks, and delivery.

Break even for Carl is $3 minus $1 divided into $48,000, or 24,000 candles per year. For the last three years Carl has sold 26,000 then 30,000 and 31,500 candles each year. Carl wants to develop a pricing program that will help him to stretch out into new areas like wholesale distribution.

If Carl keeps his price the same for all his customers he won't be able to offer a lower price to the wholesalers. But if Carl drops his price to the wholesalers, below the $3 per candle, then he would not be making enough profit. What can Carl do?

Using managerial accounting, Carl has listed out the raw material costs for his candles.
$.45 Soy Wax
$.05 Glass Container
$.01 Wick
$.15 Fragrance
$.44 Delivery
$1 Total Direct Cost per Candle

Carl can offer the same candle to a wholesaler at $3 minus 44 cents for delivery, which equals $2.66 per candle. Will this be enough to increase his sales volumes? Carl puts out a flyer and mails it to all the local wholesalers. His sales increase because now the wholesalers can distribute many more candles than Carl.

But Carl tracks the sales and notices an increase in his wholesale shipments but a decrease in his retail sales. What has happened? The wholesalers are now shipping his old retailers direct. So Carl is selling more product at a lower price. In this simplistic example you can see how managerial accounting has helped Carl make decisions about his growth oriented pricing strategy.

 About the Author
ProfessorNow.com? offers free educational courses in an easy to follow format in various subjects view a free online course covering the subject of this article.

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If You Are Considering A Career In Accounting There Are A Lot Of Choices

Accounting careers open the door to an entire world of options. You can choose from many different types of careers and opportunities. And once you settle on which career or opportunity you'd like to pursue. you have a world of options for which company you want to work for. Hence, you have variety in what you do and where you do it. Regardless of the wide amount of diversity in where to work and what to do, most accounting careers do hold one thing in common: as a general rule, they keep track of what the company makes and spends.

This is the starting foot for where you decide to go (accounting holds opportunity for job advancement). You may even decide to stay where you're at, but there usually is room for advancement. As you pursue this advancement, you gain more and more responsibilities. As you gain more responsibilities, you acquire new titles!

Titles are sometimes interpretive, as they can represent different jobs from one end of the spectrum to the next. For instance: an accounting clerk could mean anything from somebody who is a filing clerk (which means somebody who files documents pertaining to accounting), to a receptionist (who does the same similar types of tasks).

With all the talk of career advancement, you may be wondering what some options are. Staff Accountant, Controller, and CFOS are more predominant accounting careers, though there are many more beyond just them.

Staff Accountants jobs vary based on company size. If the company is smaller, they generally have the Staff Accountant perform a variety of tasks. They keep record and track of activities done day-to-day. They also may apply cash to invoices, pay the company's bills, and bill customers. If, however, the company is larger, they generally have clerks do much of the above-mentioned work, in which case, the clerks give the results to the Staff Accountant to be further reviewed.

Controllers generally oversee the entire accounting department. The Controller also makes sure tax information is accurately completed, sometimes with help with other accounting departments. They do this, and make predictions based on the history of the accounting records and on how well the company will do.

The Corporate Financial Officer or, "CFO" oversees the accounting department, and sometimes the finance department.

There is so much room for advancement when choosing a career in accounting from being a Staff Accountant, a Controller, or a CFO that pursuing accounting is a very wise choice. Even if you decide not to further advance your career, a stable career in accounting may just be right up your ally. With all this in mind, you will wonder why you did not consider accounting sooner.

 About the Author
Gregg Hall is an author living in Navarre Florida. Find more about this as well as Small Business Accounting Software at accountingsoftwareplus.com.

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The Business Cycle and Your Business

Closely related to working capital is the business cycle. In general, the business cycle is the same for all businesses. For you, however, the timing and issues are different depending on what industry you are in. I want you to learn about the business cycle because it is the rhythm of your business cycle that undermines all of your decisions.

The business cycle keeps time for your company. The pace of your business cycle will determine how much working capital you have. Like a carefully engineered machine or a finely synchronized orchestra, your business cycle is influenced by everything you and all your employees do.

The business cycle is a closed system that really begins when you purchase raw materials or something to resell. If you are in the service industry, then you are buying labor or maybe expertise.

Let's look at the business cycle of Claire's Chocolates. On Friday, Claire places an order for 200 pounds of dark chocolate at $3.35 per pound. The delivery comes in Monday morning and Claire is ready to make her weekly supply of fresh hand-made chocolates. All week, she single handedly makes and sells the chocolates in her shop. By Friday evening when she locks the doors she has sold every pound of chocolate. In fact, she can not even open the store on Saturday because she is out of chocolates.

Claire checks the register and discovers she has earned $1,398 because she sold all 200 pounds of chocolate at $6.99 per pound. Wow! She takes the money to the bank. Let's take Claire's weekly activity and apply a business cycle perspective.

On Friday, Claire placed a chocolate order incurring $670 in current liabilities because she put the 200 pound chocolate order on her supplier charge account. Come Monday she converted the $670 worth of raw dark chocolate to hand-made chocolates. She then sold the hand-made chocolates, further converting the $670 from raw chocolate to shelf inventory to cash.

By Friday, what started out as a purchase order to the supplier was turned into cash for Claire's bank account. How? All by the business cycle. It is remarkable how it all happens so quickly. But you can also see where the pitfalls lie.

Does Claire get to keep all of the cash she made? Of course not. Claire still has to pay off the $670 she owes her chocolate supplier. And Claire has other expenses too - electricity, plastic wrap, boxes, refrigeration. Still, if we were to pause the business cycle of Claire's Chocolates on Wednesday we could calculate her working capital.

To keep this illustration simple, let's pretend the only thing in Claire's business cycle is the 200 pounds of dark chocolate. Realistically, she is making and selling all varieties of chocolates.

So on Monday, if we calculate the working capital, we get current assets of $670 for raw chocolate inventory. But Claire also has a current liability of $670 for the same raw chocolate. By Monday afternoon, however, Claire has moved the raw chocolate into a shelf ready hand-made chocolate inventory. Due to the added value, her inventory is now worth $866.

Claire now has $866 minus $670, equaling $196 in working capital. By Friday, when Claire has converted all of her chocolates into cash she will have $1,398 minus $670, equaling $728 in working capital. Then Claire gets to decide how to use the working capital.

The key to managing your business cycle is velocity - keep things moving. Like Claire, you can convert your inventory to cash rapidly by operating efficiently. When your inventory sits around, your business cycle is stalled.

A common business cycle problem for many small business owners is the final step where you book your sales. Small companies spend so much time on operations and customer service that they never get around to doing the billing.

If you do not get to your invoicing then your business cycle is stalled. Jump start your cycle and keep things moving so you can bring in cash to fuel your growth to make more cash.

 About the Author
ProfessorNow.com? offers free educational courses in an easy to follow format in various subjects view a free online course covering the subject of this article.

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Payroll Outsourcing Meets High Tech: Paying Employees Online

One of the hottest trends in the outsourcing field is online payroll processing. As long as you have access to the Internet, you can have a payroll processing company available to you at all times. You can even print your paychecks from your desktop computer once you have given all of the information to the payroll outsourcing company to prepare the checks.

These advantages, convenience and professional support, have made online payroll processing a very attractive alternative for businesses. These companies will set up all of the information for proper processing of you payroll.

A company manager can input employee information at any time and the information is stored. Only when the information is transmitted to the payroll outsourcing company will the payroll be processed. This means that changes such as new employee, address changes, etc. can be entered when they are received instead of all information having to be keyed in at the busy time when payroll is being prepared. It is recommended that a separate computer system is used for this purpose to avoid security risks.

It is easy to understand why web based payroll processing by outsourcing has become so popular. A company has the choice of going directly to the providers website and inputting all the necessary data, and the payroll processing company then does all of the calculations. Since the security of this sensitive data is so important, secure socket layer encryption is used to prevent anyone else from accessing or changing the data. These secure data centers have multiple firewalls for safety. Alternately, the company can store all of the information on its own computer and then transmit that information to the payroll processing company when the payroll date approaches.

Another distinct advantage of online payroll outsourcing is that it virtually guarantees that payroll taxes will be paid on time. Companies can also more readily supply credit information for an employee because this can be done directly with the bank. A company considering online payroll outsourcing should research the available options and make sure they choose the outsourcing company that will give them quick, accurate results while providing top notch customer support.

A really big benefit, however, is the ability to rely on accurate accounting reports and not have to be concerned with audit problems or sarbanes oxley. Outsourcing will take the risk off of your company and put it on the outsourcing company (check your contract). When it comes to audit and sarbanes oxley (if your company happens to be public), you do not want to fool around at all. 

 About the Author
MJ Batta writes job outsourcing related topics and hosts a job outsourcing research site at outsourcing-american-jobs.com and a special outsourcing report at researchthisstuff.com

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The Importance of Capital

In general, capital is a term used to define resources used to make money. Basically, you use capital to make something else. If you are interested in economics, there is a lot to learn about the concept of capital as an input into the production process.

But we are talking about accounting and finance for your small business, so we will lean towards the accounting interpretation of fixed capital. In practical accounting terms, you can think of fixed capital as fixed assets. The fixed capital assets are used to make something which is then sold for revenue. This is how you convert your capital to cash.

If you want to see your capital, pull out your balance sheet and look on the asset side. Do you see machinery, buildings, trucks, or trailers? If your balance sheet does not include that level of detail you may need to ask the accountant for an asset listing. For those of you who are already hands on, you may have created the asset listing yourself.

In addition to your fixed capital, you should have some working capital. The working capital is what you use everyday in operations - think of it as your on hand capital. Remember from our earlier discussions that resources like inventory and raw materials are assets?

If you take your current assets, like cash, raw materials and inventory, then subtract your current liabilities, like accounts payable, you will get your working capital. Hopefully, the amount of working capital you have is enough to get you through a few weeks of tough times. The working capital is what you need to manage everyday because if you do not, it will diminish and you could run out.

Running out of working capital is bad because that means you are off balance. Your assets, including cash, will begin to pale against your liabilities. It is not easy, however, to manage the working capital. It takes hard work and understanding. We will talk a lot more about working capital in lesson two.

Most small businesses begin getting capital when they first start out. You plan to make money and you need to have some capital to use in making money. Some small businesses can take off from the beginning and do not need another infusion of capital.

If your business is growing at a rate that lets you reinvest earnings and keep growing then you might not need to look for more capital. But some business plans require regular infusions of capital, especially in the beginning growth stages, to stay on target.

It is okay to need more capital so long as your growth plans and future profits can support the payback of more capital. Some capital is secured through collateral and is not really at risk until you can not make a payment and the equipment is taken away. This could have disastrous effects on related parts of your production system.

 About the Author
ProfessorNow.com? offers free educational courses in an easy to follow format in various subjects. View a free online course covering the subject of this article.

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How to Monitor Your Cash Flows With A Cash Flow Statement

A cash flow statement is a financial reporting document displaying the cash outflows and inflows of a company on a monthly or quarterly basis. This report reflects the effects of changes to the balance sheet and income accounts on the cash position as well as analyzing the operating, investing and other financial aspects of the company. When analyzed, the cash flow statement helps assess the short term capability and practicality of the company as to whether it will be able to fulfill its obligations to pay its bills or not.

Those who may be interested in studying the cash flow statement include:

- The accounting department
- Creditors and other lenders who need to assess the repayment capability of the company
- Investors who will judge whether the company is economically sound and viable
- Contractors and would-be employees who need to know whether the company will be able to fulfill its financial obligations

Companies that have limited fluid assets and which are just beginning operations are most in need of cash flow statements because they may be vulnerable and may experience cash shortfalls in spite of having healthy Accounts Receivables balances.

It is important to design a good cash flow statement that will translate the accrual basis of preparing an income statement as well as the balance sheet back into cash basis. The importance of this method is underscored when considering the fact that cash basis statements help in analyzing the actual amounts of cash flowing in and out of the business. Though the accrual basis may accurately reflect the company revenue and expenses the cash flow statement will additionally map out what happens when changes to the balance sheet are made. There are four different kinds of cash flow statements:

- Net cash flow statements that reflect operating activities. The generation of cash inflows and outflows that reflect the daily operating behavior of the business and includes cash received from customers, cash paid to suppliers and employees, and operating expenses, interests as well as taxes, and cash income received from dividend payouts.
- Net cash flow statements pertaining to investing activities. Mainly reflects the sale or purchase of equipment.
- Net cash flow from financing actions. Inclusive of common stock, short or long term loans changes as well as paid out dividends.
- Net changes in cash as well as marketable securities. To check whether the calculated amounts of increases or decreases in cash and marketable securities as arrived at from the above three points are in tune with those reflected in the balance sheet to help ascertain if the calculations were correctly made.

Though there are a number of different people interested in viewing the cash flow statement, each wanting their own perspective of the business, this financial statement is most important to management, lenders, tax officials and investors. The importance of this report is that it reveals the entire picture about the business and this is very helpful as it will reveal whether the business has enough cash or not to meet its obligations.

With cheap cash flow statement documents being available for as low as US$10 it is indeed a bargain to purchase one and use it for one's business instead of going through the hassles of preparing one from scratch. These prepared documents usually take into account the various needs of different businesses and can also be tailor-made to suit individual needs.

 About the Author
Wade Anderson is a CPA and operates DigitalWorkTools.com, the premier internet site for Legal Forms and Business Documents. Find more information on using this document, contracts, forms, and spreadsheets.

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Give Your Customers The Credit They Deserve, Use A Credit Application

The credit application form for business to business is a great tool for small business owners, sales and marketing managers and entrepreneurs as well as anybody else who is connected with business in any way to apply and obtain credit. Used by most companies, it provides a lot of functionality for managing the sales and marketing activities of the company and has been designed specifically for making the credit business successful. The credit application, along with credit history keeps tabs on the customer's past performance history in conjunction with an analysis program, helps calculate revenues, and costs.

Typically, the credit application form is an uncomplicated form that requires the following information:

- The name of the company applying for credit
- Years in business that the company has been in
- Complete address and phone numbers
- Nature of the company e.g. sole proprietorship, partnership or corporation
- Names, title, address, phone number of partners, principals or corporate officers
- Names, title, address and phone numbers of financial contacts
- Names, account numbers, contact names and titles, phone numbers of bankers
- Names, contact names and titles, phone numbers of trade references
- Signature and date certifying that the information provided is true and accurate

Once the information has been entered into the credit application form, the company can use it as a determining factor in extending terms. Also used in this determination are the monthly cash flow statements, monthly sales projections as well as reporting milestones and accomplishments for each potential customer. All this information generates better service from the company and is used to report and assess the customer's past credit performance.

According to the terms and conditions of the credit application for businesses, the customer must ensure and warrant that the purchases he makes are intended mainly for use in the business and not for personal and family usage. In addition, the customer agrees to pay interest at an agreed-to rate of interest. In case the customer's check is returned from his bank, he shall agree to pay a fixed charge on these returned checks. The customer also assures the company extending terms shall be paid within reasonable time and in case of litigation and disputes, the customer shall bear the expenses for attorney's fees as well as other legal fees.

The credit application form is a complete document that requires detailed information that should be duly filled out; such pre-formatted forms are readily available in the market and it makes good sense to buy these inexpensive documents rather than try to reinvent the wheel and get caught in the tricky business of making one from scratch. These low cost, exhaustive and detailed forms have already had experts and lawyers draft them to meet any eventuality and so afford a reasonable cost-effective solution to finding an appropriate form that does not take time to fill, and fits individual needs adequately.

 About the Author
Wade Anderson is a CPA and operates DigitalWorkTools.com, the premier internet site for Legal Forms and Business Documents.

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