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Online Bookkeeping Solutions Blog

The Online Bookkeeping Solutions Blog is an timely collection of interesting and helpful information for those companies who want to outsource their bookkeeping solution and utilize bookkeeping services by subscription. Outsource your bookkeeping to a cloud based solution backed by experienced CPA's.

Form 941 Deadlines

Form 941 is used for the portion of taxes that employers pay of taxes withheld from employees and the employer’s share of Social Security and Medicare.  More than four different payment deadlines exist for federal employer taxes.

The majority of employers must deposit Form 941 payroll taxes on either a monthly or semiweekly deposit schedule. Exceptions exist if you owe $100,000 or more for a single day, or if you owe $2,500 or less for the quarter. When federal employer taxes for a single day exceed $100,000, the taxes must be paid by the next banking day. If payroll taxes are under $2,500, payment is due quarterly when Form 941 is filed.

Sound confusing? It is, and it is wise to consider outsourcing this aspect of payroll to experts, and avoid the complexity and liability associated with meeting your payroll tax deadlines. If you fail to make your required deposits on time, or if the deposits are for less than the required amount, the penalties can add up quickly.

For amounts not properly or timely deposited, the penalty rates are as follows:

  • 2% – Deposits made 1 to 5 days late
  • 5% – Deposits made 6 to 15 days late
  • 10% – Deposits made 16 or more days late

As you can see, it’s not only complicated to figure out how much you owe, but also to figure out when you owe payment. Since fines add up quickly, it might end up saving you money to outsource payroll to professionals rather than risk incurring these fines.

 

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Learn to Like Your Numbers

If you tend to neglect your bookkeeping, you’re not alone. A huge number of business owners let their numbers fall to the wayside, and unfortunately their businesses pay the price. But this doesn’t have to happen to you. In fact, a good bookkeeping system provides the opportunity for you to actually advance your business.

The two most popular areas of financial neglect are 1) failing to track income and expense data into a bookkeeping system and 2) not using the numbers to understand your  business’s financial health. Even if you are successful at tracking your data, enough so to keep your business alive, if you don’t make use of it from a strategic standpoint, you may lose valuable insights for how to help your business grow and thrive.

If you hate working numbers, or lack the time and ability to do so, there’s good news. Affordable bookkeeping software can automate most of the work – from basic account tracking to generating sophisticated reports for you. These reports, such as cash-flow projection and profit/loss reports, reveal the true health of your business and allow you to see and understand trends and patterns in your business’s finances and identify profitable avenues to pursue.

You’ll be able to price goods and services more competitively, plan an efficient growth strategy, and identify and trim extraneous costs

You’ll able to maximize your tax write-offs by timing your purchases strategically and claiming all your deductible expenses–things that often escape businesses with disorganized records

You’ll be empowered with better management of your business’s cash flow. This will help you pay bills, taxes, payroll, etc. on time so you don’t find yourself short on cash – which could force your business to close its doors for good.

 

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How Lockboxes Help Business

Using a lockbox service shortens the amount of time necessary to process your customers’ payments. Offered by banks, this service gets your money into your account quickly and efficiently. It frees you from the tasks of mail collection, processing, and depositing customers’ payments. It’s ideally suited to small businesses that typically receive payments by mail and want their money in the bank as soon as possible.

It works like this.

Mailed payments from customers are received at a single, specially designated post office box and then delivered to the bank directly for processing. Your bank’s personnel opens the payment and extracts all of the remittance advice data and amount details and collates all of this information into a file that is sent to you the same day. In some cases the information can be imported directly into your accounts receivable system.

Since the check goes directly from lockbox to bank, payments are received and deposited all within the same day. Doing this work yourself can delay the deposit of the payments depending on how long it takes you to process your customers’ payments for deposit, and then to actually make the deposit at the bank.

Today’s increased automation in payment processing has allowed banks to reduce the cost of their lockbox banking services enough to make it economical for businesses of a smaller size. Since most banks will customize their lockbox banking services and costs to fit your specific needs, you should contact your bank for more information.

 

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Turn Your Staff Into A Team

A great team relies on everyone to generate ideas, initiate projects, see them through, and to produce consistently high quality work. Many businesses have a staff of employees who get their job done sufficiently well to justify their paycheck; but these businesses are missing out on the rewards that come from real teamwork.

The solution to this situation is to turn your staff into a team. Team building can transform your business into a smooth running, harmonious workplace with better interpersonal relationships and a greater level of satisfaction for all involved.

One of the keys to building a team is to systematize the business’s processes, operations, and goals. This makes it possible for team members to work together more fluidly because they understand one another’s job and can pitch in when help is needed.  Real team players don’t try to keep their job functions a secret to protect themselves – they go the extra mile to help the team meet its overall goals.

Involve your team in the set-up of systems and the defining of the business’ goals. This will give them a feeling of participation and ownership in decision-making instead of making them feel like they are receiving orders from above. Once your business has good systems and goals in place – and don’t expect this to happen overnight – make sure they are well communicated to everybody on the team.

Keep in mind that your team isn’t going to do things exactly the way you would. But give others a chance to perform and with adequate support they’ll measure up.

Chances are there’s room for some team building in your situation, and there’s no time to start like the present. Call a meeting with your team and be open with them. Tell them what you’re trying to do and listen to what they think. That’s how it begins when you want a team rather than just a staff.

 

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5 Tax Tips for Small Business

Small businesses can easily have a smooth experience when they file their taxes, especially if they’ve planned accordingly. This means having the right bookkeeping solution in place, as well as a good accounting system, to aid with filing and to decrease costs associated with tax preparation.

Here are some quick tips that can help you be ready at tax time.

  1. Keep all invoices and receipts. You can reduce the amount of taxes you owe by writing off everything that can be classified as a business expense. For example, if you buy new business assets, such as office equipment, you may be able to write off the cost that year. Not sure if you incurred a “business expense?” Be cautious and hold on to that receipt!
  2. Update financial records daily. This will be easy if a trusted online bookkeeping system is in place to ensure that your invoices and receipts are entered into your accounting system.
  3. Keep all your tax documents for at least four years. Four years is only a guideline; many small business owners keep tax documents indefinitely. You should consider saving your tax documents electronically if you don’t already.
  4. Keep track of how much you use your car for business purposes. Keep a small travel diary in your vehicle and write down your odometer readings each time you travel for business purposes. You can deduct the mileage that you accumulate for the business portion of your travel.
  5. Check the Internal Revenue Service’s website for small businesses. You can gather information and download forms that will be helpful to you. Often, there are business tax credits available for you to take advantage of. You may also learn things you were unaware of that will help with your taxes. For example – If you have taken out a loan to start up or operate your business, the interest on that loan is tax-deductible.

 

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