5 Strategies to Improve Efficiency in Your Small Business

Have you ever visited a car production plant where the vehicles we all drive are designed in a step-by-step manner? If not, you’d be amazed how efficiently these processes run in terms of saving both time and money. While your small business might be just a blip on the map compared to the size of an auto production plant, there are still many ways through which you can improve the overall efficiency within your enterprise. Consider the following strategies:

1. Evaluate/improve how you operate as a small business owner.

What is the initial step you should take in this process? It might be challenging, but look at yourself in the mirror, and conduct a thorough evaluation of how you are managing the daily duties of your small business. Are you completing your tasks in a timely manner? Is your workload just too heavy where you are having difficulty handling it? Are you procrastinating on things that are not priorities? Put your most important priorities at the top of your to-do list and focus on them each day. This will immediately improve efficiency for you as a small business owner. If you can’t determine your weaknesses yourself, ask those around you for their thoughts for a more objective perspective.

2. Evaluate/improve how your employees or contractors work.

After you take a good look at your own way of operating your business, do the same for any employees or contractors who perform some type of work for you. See whether or not they are fulfilling their specific duties. In some cases, you may have to modify the assignments of an employee or contractor to maximize their abilities. A face-to-face conversation could also help the situation and improve their efficiency as employees. On the flipside, don’t assume all employees know the most efficient methods of doing things. This is where the ball lies in your court to educate them on these strategies. The last thing you’d want is to pay someone a decent salary as part of your overall income and have them conduct their tasks in a way that is anything but efficient.

3. Let others handle certain duties for you through outsourcing.

Consider outsourcing certain responsibilities in your small business to those who are experts at taking care of them. Let’s say you have no experience handling bookkeeping for a business and, furthermore, have no desire to do it. Pass off your bookkeeping needs to a professional bookkeeper or service provider. The same goes for IRS business accounting and tax requirements, which are often much more involved than the tax obligations of individual taxpayers. Outsourcing can give you a lot more time to focus on your core strengths. It should also help your efforts to improve how efficiently your company runs and, in turn, drive more revenue into your business bank account.

4. Beef up the technological side of your business.

Technology can offer a tremendous amount of convenience and efficiency for small business owners across all industries. Upgrade any pieces of technology you utilize, such as PCs, laptops, tablets, and smartphones. Check out the latest mobile apps that might be able to benefit your company’s processes. But only make these upgrades or purchases if they would serve a true purpose in the overall efficiency of running your small business.

5. Improve your organizational skills.

Organization and efficiency are tied at the hip. Maintain hard copies of any important documents in a folder or file cabinet. Keep files on your technological devices in organized folders that you can get to quickly when you need to access them. Maintain separate phones, computers, and e-mail accounts for your small business rather than blending these duties with your personal activities. Having solid organizational skills can go a long way in managing a company that is operating efficiently.

For all of your small business accounting and development needs, turn to the pros at 1-800Accountant. To learn more, call 1-800-222-6868 or visit www.1800accountant.com.

4 Tax Tips Working Parents Should Have in their Back Pockets

Working parents can use numerous strategies to help reduce their taxes, including IRS tax deductions and credits.

Working parents can use numerous strategies to help reduce their taxes, including IRS tax deductions and credits.

Happy Working Parents Day! Today we recognize the tremendous efforts of those with two incredibly important responsibilities – working hard to pay the bills and raising children at the same time. Check out these tax tips for working parents that may be able to help you save some money – and have some extra spending cash for tokens at the arcade that your kids will certainly appreciate!

1. Know your tax-filing status with the IRS.

When you become a parent, your filing status could very well change. For example, you could go from being a single taxpayer to head-of-household status. This is because you can claim your child as a dependent on your tax return, which offers some nice tax savings. The same goes for married couples with children who file either jointly or separately.

2. Claim all tax credits related to being a parent.

Parenthood comes with a number of valuable tax credits. By simply having kids, you may be eligible to claim the Child Tax Credit, which is worth up to $1,000 per child under age 17. The Earned Income Tax Credit (EITC) is also available to parents in the low to moderate income range. The Child and Dependent Care Credit may cover up to 35% or $3,000 spent on child care per year. If your children are older and going to college or a technical school, it’s worth exploring the American Opportunity Tax Credit and the Lifetime Learning Credit. These two education-related credits have different income levels, but both can be quite beneficial from a savings standpoint.

3. Claim all IRS tax deductions related to being a parent.

Have your kids outgrown some of the clothes and toys in their closet? If so, take them to a local charitable organization, donate them, and then claim this as a charitable contribution deduction. If you are a working parent, you may not have much time for volunteering. But if you help out with your son’s Little League team or daughter’s Girl Scout troupe, expenses like mileage, gas, uniforms, and other costs you are not reimbursed for may qualify as part of a charitable tax deduction on your return. Are you faced with high tuition costs to put your child through college? The Tuition and Fees Deduction can likely reduce this burden a bit by letting you write off some tuition costs and other fees associated with having a student enrolled in higher education.

4. Own a small business? Put your kids on payroll.

Small business owners who have children over age 7 may be able to take advantage of some nice tax benefits. By sticking one or more of your kids on payroll, you can use income shifting to essentially shift income to them, but then you can deduct a portion of this income as a write-off. Depending on how old your kids are, you could have them do simple tasks for you – taking out the trash at your office, inputting basic customer information into a database, checking voicemails for you, or anything you wouldn’t mind putting in their hands to lighten your load. It’s a win-win situation for all involved as they get compensated for their work and you save on your taxes.

To get more tax tips for working parents and strategies to reduce how much you owe Uncle Sam each year, turn to the accounting experts at 1-800Accountant. Call 1-800-222-6868 or visit www.1800accountant.com for details.

4 Reasons You Should Be Saving Your Small Business Receipts

While many entrepreneurs and small business owners save receipts, they often throw them in a drawer in which they pile up over time. Don’t let this happen to you. Receipts are way too valuable to either throw away or put in a disorganized pile where you’ll never find any specific ones you’re looking for. Here’s why:

1. They can help you claim business tax deductions.

Despite the never-ending list of expenses involved in owning a business, the IRS fortunately lets small business owners claim upwards of 400 business tax deductions on various expenses they incur when filing with Uncle Sam. But to claim many of these write-offs, you may be required to have all relevant small business receipts on file that you got with any goods or services you have purchased to run your enterprise. Why? The IRS needs some type of proof that what you’ve bought is for your business instead of for personal use.

2. They can help keep your business finances in order.

Saving small business receipts is an excellent way of keeping the financial situation of your business in tiptop shape. Whether it’s bookkeeping, payroll, or business taxes, there are countless financial details related to operating a business. In addition, you should constantly keep close tabs on your business expenditures compared to the income you are bringing in as revenue. You’ll never have to rack your brain about a certain item you bought and what it was for if you save all of your receipts in an organized fashion.

3. They can help you determine how to reduce your business expenses.

Along with helping you keep up with your business expenses, saving receipts can also aid in cutting down on the amount of money leaving your company. When you know what types of costs you are paying, you can determine if any aren’t totally necessary – or if they could be cut from your budget. Financially-strapped business owners are always on the lookout for ways to save money, and this is a simple way to achieve that much-desired goal.

4. They are a proof of purchase for warranties or returns.

Receipts are typically required to have in-hand when returning any items to the retail location where they were purchased. This is particularly important for any large purchases you make, such as expensive outdoor equipment, electronics, or computers that you simply can’t use or don’t need after trying them out. Plus, if you pay for a warranty on a product, you may need the receipt in order to prove that you did buy it if there are any questions related to your warranty.

For all of your small business accounting needs, be sure to contact 1-800Accountant today by calling 1-800-222-6868 or by visiting www.1800accountant.com.

Gross Income vs. Net Income: What’s the Difference?

Gross income vs. net income in a small business

Gross income vs. net income in a small business

The ultimate goal of any entrepreneur when starting a business is to maximize their income – or, in laymen’s terms, the money they bring in from sales and other indirect income generators. However, the term income has multiple meanings, and it’s important to understand the difference between various types of income, such as gross income and net income.

When putting together an income statement for a small business, it is necessary to determine your gross income and net income amounts. Armed with this information, you’ll be able to determine your biggest expenses, along with the largest income generators within your enterprise. This will let you make any adjustments that are necessary in terms of what you are spending money on and how to make more of it. Plus, this information is required when preparing your business income tax return before filing it with the IRS. If you are looking for investors to help fund your venture, they may ask for a copy of your income statement to decide whether or not to offer funding. If you need to borrow money in the form of a loan, a lending institution like your local bank will review your gross and net income amounts before lending any capital to you.

What is Gross Income?

Gross income is made up of all the income your business earns throughout a given year. To calculate gross income, add up all of your cash, checks, credit card charges, investment income, dividends and interest, debts, damages and lost income payments, and any other relevant income generated by your company within a certain year. When calculating gross income, it’s best to avoid deducting any expenses so that you get a completely accurate amount.

What is Net Income?

Net income refers to the amount of profit your company generates after subtracting any business expenses you incur and any other allowable deductions from your gross income. Business expenses generally include the cost of goods you sell, advertising and marketing costs, transportation expenses, office and equipment costs, utilities, wages and funding of employee benefits, maintenance and repairs, and taxes.

If your amount of net income falls on the positive side, your business will likely be able to report capital gains. But if this figure is negative, you may be able to report a deductible capital loss.

To learn more about gross income, net income, and other financial figures related to starting a business, contact 1-800Accountant today. Call 1-800-222-6868 or click over to www.1800accountant.com for details.

History and Purpose of Taxes

As Americans, we all have to pay taxes. But when did the federal government start imposing these fees on us? And what are the primary purposes behind them?

The history of taxes in the United States dates back to before the nation’s founding during colonial times. In the 1760s, colonists protested against taxes levied by the British Empire. The independent nation initially collected taxes on imports. States and municipalities levied poll taxes on voters and property taxes on land. A stamp tax on printed materials was also levied, and the Boston Tea Party served as a protest against Britain’s taxation of tea, ultimately signaling the Revolutionary War and the independence of the U.S. in 1776. State and federal inheritance taxes came into play after 1900, and the states began imposing sales taxes by the 1930s. The first income taxes were levied in the 1860s by President Lincoln to help fund the Civil War and again in the 1890s, but they did not become permanent until 1913.

Even though we often fret about paying taxes, they are an important and necessary function of a thriving democracy. There are lots of government services that could not survive without using tax dollars to fund them. At the federal level, these include Social Security, health care, national defense, and social services like food stamps and public housing. At the state level, tax dollars go toward public schools, roads, prisons, and other social services for low-income families. Local municipalities use taxes to pay for water, waste management, police, and fire departments. Imagine what our country would be like without all of these necessary functionalities.

If you have ever wondered why taxes must fund these services rather than having citizens simply pay for what they use, the answer is simple. Nobody could afford paying for things on their own. In fact, everyone would have to pay the same amount for services regardless of their ability to do so. That is why the American tax system is based on the financial abilities of each taxpayer. The more money someone earns, the more that person will pay in taxes. On the flipside, those who make less pay back less to the government and Uncle Sam. The bottom line is we all have to pay our fair share in taxes to enjoy the benefits of living in a free and safe society.

Aside from the taxes you simply can’t avoid, there are ways to reduce your personal and corporate taxes overall to make the most of your finances. Contact 1-800Accountant today for more information. Call 1-800-222-6868 or check out www.1800accountant.com.