How to Get Paid Faster – Accounts Receivable Turnover

Here’s a simple way to figure out how quickly you’re collecting–and how to do it faster.

Accounts Receivable Turnover (ART) is a measure of the frequency of payment on accounts receivable, the money owed to you by your customers you are waiting to “receive.”

The lender is simply taking a close look at one of the factors that affects cash flow. In effect a credit sale is like a loan, so the lower the ratio the more slowly your customers are paying off the loans you make to them; the higher the ratio, the more quickly you’re being paid.

How fast are you getting paid?

Here’s the formula: ART = net credit sales / average accounts receivable

For example, say last year your net sales were $200,000. You don’t take payment by credit card; you send invoices. The average, at any given time, of your outstanding receivables was $50,000.

200,000 / 50,000 = 4, so your Accounts Receivable Turnover is 4.

If your customers purchase goods or services through a purchase order, or you send invoices, the money you are owed is considered a receivable. If you’re a consultant and you perform a service and bill the client later, the bill is a receivable–it is money you are owed but have not been paid.

Read the full article here http://www.inc.com/jeff-haden/how-to-get-paid-faster.html


The Single Most Important Rule of Business

Entrepreneurs are great at meeting challenges with optimism–but sometimes that’s not what the business needs.

There’s a funny thing about entrepreneurs: They’re often way too optimistic about sales and way too pessimistic about prices.

I’ve witnessed this phenomenon many times over the years, most recently in two women with whom I’ve been working. A few months ago, Carey Balogh and Julia Dawson opened a play space for kids near my home in Brooklyn, New York. It’s called Frolic, and it offers classes, birthday parties, a boutique, a coffee lounge, and a play area, all with a rock ‘n’ roll theme. It’s a great concept, and it will be very successful, I’m sure. But first, Carey and Julia need to learn that business decisions must be guided by numbers, not emotions.

When Carey and Julia come to see me, they’re always bubbling with excitement. They can’t wait to tell me how well things are going—how many members have signed up, what new offerings they’re considering, the great publicity they’re getting. Then we go through the numbers and discover that they’re not yet breaking even. They’re losing money every week. “You have to make some changes,” I told them recently. “If you don’t, you’ll run through your capital and be left with two choices.”

Read the full article here http://www.inc.com/magazine/201206/norm-brodsky/street-smarts-most-important-business-rule.html


1-800-Accountant Hosts Event for University of Miami School of Law in NYC

1-800-Accountant hosted an event in the Empire State Building for students of the Miami School of Law, featuring prominent local attorneys.

1800Accountant.com hosted the University of Miami School of Law in New York City on Friday. Newly admitted students from the Northeast were invited to spend an evening in the Empire State Building at the headquarters of 1800Accountant. Prominent attorneys from the New York area welcomed the incoming class of 2012 and addressed questions about succeeding in law school and transitioning back to New York after graduation.

“It’s always great to meet with incoming law students,” said Preston Clark, head of business development for 1800Accountant. “At a time when the legal landscape is changing, it’s important to discuss with new students how attorneys use their education in unconventional ways. 1800Accountant partners with law firms and legal document service providers around the country—and having a law degree has been instrumental in my success.”

About 1800Accountant

Established in 1999, 1800Accountant provides small businesses with unlimited business tax consulting and tax preparation services through a centralized and national network of highly skilled, licensed CPAs, accountants, and tax professionals. Let 1800Accountant help you keep more of your hard earned money. Schedule a free consultation at 1800accountant.com or give them a call at 1-800-222-6868.

Steps to Starting a Business with the Support of 1-800-Accountant

Entrepreneurs and owners of start-ups need to follow these simple steps before making their first sale.

A variety of new business services in business planning, business tax preparation, bookkeeping, and more are catered to start-ups and new business owners around the nation from the small business tax professionals at 1-800-Accountant.com.

Even before a new business owner has his or her first sale, the experts at 1-800-Accountant provide a thorough check list detailing important tasks to be completed.  This list starts with deciding which type of business entity you will create (sole proprietorship, S Corporation, C Corporation, etc.) and choosing a legal business name.  In addition to a legal business name, you will receive an Employer Identification Number or a Federal Tax Identification Number, with which you will then be able to open a business bank account at the bank of your choice.  If your business will have employees other than the owners, 1-800-Accountant will assist you in complying with payroll reporting requirements.  Many small businesses will require certain types of insurances as well as be subject to sales or local taxes.  The business start-up professionals at 1-800-Accountant.com can assist new business owners with these steps.

Finally, acquiring the necessary computer and accounting software will help to keep any small business’s financial records in line as required by the IRS.  The tax and business planning professionals at 1-800-Accountant.com are available to answer questions and walk small business owners through each step of the business start-up process.

About 1-800-Accountant.com

This accounting firm assists small business owners and entrepreneurs in keeping more of the money that they earn with their business tax preparation and planning services as well as expert business start-up assistance.  The 1-800-Accountant tax specialists help small business owners with sales tax, payroll tax, S Corporation, LLC & Partnerships, Quickbooks, Bookkeeping, IRS and State Audits, and more.  The company offers free consultations by calling 1-800-222-6868. To learn more about starting your own business, please visit: http://www.1800accountant.com.

Small Business Expenses and Tax Deductions

The following article discusses small business expenses in addition to the two tax deductions, business expense deductions and capital expense deductions.

Guidance for the Self-Employed and Sole Proprietors

There are two basic tax concepts new business owners need to add to their vocabulary: business expenses and capital expenses.

Business expenses

Business expenses are the cost of conducting a trade or business. These expenses are common costs of doing business, and are usually tax deductible if your business is for-profit. For example, costs of renting a storefront, business travel and paying employees are all deductible business expenses.

Capital expenses

Capital expenses are the costs of purchasing specific assets, such as property or equipment that usually have a life of one year or more and increase the quality and quantity of products and services you can provide. For example, if you own a landscaping business and you purchase mowers and excavating equipment, these costs are capital expenses and do not qualify as deductible business expenses. However, you can recover the money you spent on capital expenses through depreciationamortization, or depletion. These recovery methods allow you to deduct part of your cost each year so that you are able to recover your capital expenses over time.

Read the full article here http://www.sba.gov/content/small-business-expenses-and-tax-deductions