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Different Methods of Purchasing

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Production is an essential element of any business. You cannot achieve smooth production until you have the required equipment and raw material. Purchasing the material and equipment is quite simple; order, receive, and pay.

But, you can make it easier.

Organizations follow various purchasing methods to cut costs, ensure the availability of raw materials and make better relationships with other businesses. Understanding the different methods of purchasing allows you to devise a suitable procurement plan for your company. Here’s everything you need to know about purchasing methods.

Bulk Purchasing

Bulk purchasing is the most common method of purchasing goods in large production units. Bulk purchasing refers to buying a huge quantity of material at once to use over a period. It is the most economical method of purchasing. You can get the required material and objects at a lesser price when you buy large quantities. However, it needs more investment, occupies space for a long time, and you may face loss if the material is not used timely.

Purchase Per Need

The next common method of purchasing goods is purchase per need. It is also known as hand-to-mouth or zero stock purchasing. It refers to buying an item only when the need arises without keeping much extra stock at hand. Zero stocking is used mostly for emergency needs or materials of office use that you cannot quantify beforehand. It offers numerous benefits like having more money at disposal and avoiding the waste of materials. Yet, it also comes with a few risks and disadvantages. One of the most critical drawbacks of this method is the unavailability of the material in the market when needed. Thus, many companies prefer stock buying to avoid issues in production due to zero stocking problems.

Purchasing

Blanket Purchasing

Blanket purchasing means buying something from a supplier for a long period. The vendor usually knows about the demand for the material beforehand and continues to supply per need. Usually, blanket purchasing orders account for items of a particular category. They help improve the procurement process by somehow automating the process.

Specific-Period Purchasing

Purchasing for a specific period is not required in all industries. Yet, it is important for some materials like chemicals that you cannot store for a long time. Companies prefer purchasing for a specific period when the overall cost of bulk and a small amount of the material is almost the same. It allows you to save costs by preventing the loss of the object. The quantity is calculated according to previous needs to buy the material good for a short period. It is one of the most appropriate inventory management methods for avoiding bulk purchasing short-life materials.

Scheduled Purchasing

As the name suggests, scheduled purchasing involves informing your vendor about the upcoming demand for material and pre-book it. Scheduling a purchase enables the vendors to arrange the supplies within the hour of need. It is an excellent measure of avoiding delayed production because of a supply shortage. Scheduled purchasing also saves you from the burden of managing purchase inventories of material for months. It may also sometimes give you a better cost compared to urgent buying. Other benefits of scheduled purchasing include an on-time supply of required materials and high-quality goods.

Market Purchasing

Market purchasing is a common practice, not only in industries but also in our daily life. Market purchasing means buying products when they hit a low price. The company might not require the material immediately, yet it can be used in the future. Market purchasing is favorable for items that can stay on the shelf for a long time without the fear of wastage. However, this method of purchasing requires a proper calculation to buy the right amount of material. Over-purchasing may lead to a loss. While it can sometimes help you save a considerable amount of money, you may also lose some in case of miscalculation of quantity.

Speculative Purchasing

Speculative purchasing is similar to market purchasing but from a different perspective. Speculative purchasing refers to taking advantage of low prices of a material in the market to sell it at a high price later. It comprises making bulk purchases and storing them to make a considerable profit from them. Speculative purchasing is different from market purchasing as it involves selling goods. On the other hand, market purchasing is done for the company’s own cost reduction. Besides the advantages of speculative purchasing, it may sometimes result in a long period of keeping inventory till the prices rise.

Group Purchasing

Group purchasing comprises buying multiple small items of different categories together to reduce cost. Often the quantity of these goods is even less than the cost of order placement. The vendor and the organization agree on a mutual price considering the supplier’s profit. It reduces the stress of visiting multiple places to buy products and lessens the workload. Instead, the supplier purchases and supplies the materials altogether.

Cooperative Purchasing

Cooperative purchasing is another group purchasing approach. However, it involves more than one company buying together. Companies looking for similar goods place bulk orders with the vendor instead of buying small quantities at a higher price. It also helps reduce transportation costs. It is common among companies producing the same kind of products.

Reciprocate Purchasing

You may understand reciprocate purchasing as barter. Reciprocate purchasing refers to an understanding between two or more companies to buy each other’s products and services. It is feasible to offer such services when both companies can benefit from each other and reduce overall costing. Reciprocate purchasing is not the most common practice, yet many businesses opt for it.

The Bottom Line

Procurement in an industry requires proper planning to purchase high-quality goods at the best prices. Some companies prefer bulk buying while others believe in zero stocking. You may also make blanket purchase orders or opt for market purchasing for efficient procurement. There is no particular right method of purchasing for all. It depends on your company’s needs and production approaches. Choose the one that best fits your organization to save costs without disturbing operations.

The Pros and Cons of Hiring a Fractional CFO

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If you want your business to be successful, then you’ll need to manage its finances as well. Financial management is a task that needs to be handled carefully. One way to make this process easier is with the help of a fractional CFO.

A fractional CFO is an outsourced CFO, who works either part-time or temporarily for a business. They help business to manage their finances. A fractional CFO is an expert in both finances as well as accounting. But why hire fractional CFOs?

The Benefits of Hiring Fractional CFOs

You may be wondering what the benefits of hiring a fractional CFO are. They include:

Improved Ability to Make Decisions

A fractional CFO can provide you with all the information you need, in order to make informed financial decisions. Fractional CFOs can provide invaluable insights, that can help you in making critical decisions. You can find help with exploring various financial options, during the launch of new products or services, and more.

A fractional CFO will first analyze the financial position of your business, and then help you regarding what decisions you should make to improve your finances. They can provide how with detailed plans, which come with the actions you need to take. They’ll analyze where your business stands financially and can help you make investments.

Saving Time and Resources

When you hire a fractional CFO, you’ll be able to save time as well as resources, over hiring a full-time CFO. A fractional CFO will work remotely. A full-time CFO on the other hand needs to be provided with an office space.

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Your fractional CFO will only work when you need them to, so you don’t have to pay them more to hang around your office. This can help you reduce your overhead costs. The work that a fractional CFO does, is also more focused than what full-time financial managers do. A fractional CFO can work for your business using fewer resources, and in less time than it would take a financial manager to do the job.

They are Experts on Financial Information

Fractional CFOs have deep knowledge in the fields of accounting and finance. They understand how taxation works, how to make budgets, how to analyze financial statements, dealing with acquisitions and mergers, and more.

Your fractional CFO will be able to provide you with information on how profitable your business is. They can look at your cash flow, and let you know where you’re losing money. They can also provide you with suggestions on how to better streamline business operations. They can help you recognize areas where you can improve your business, and provide you with a better understanding of your business finances. This can in turn help you scale your business.

Boosting Productivity

When a fractional CFO is managing your business finances, you as well as your employees can focus on business tasks that add value. Instead of monitoring your business finances, your employees can turn their focus on marketing better to clients. You’ll also be able to allocate business resources toward the development of new products or services when they’re needed.

Since you’ll be assisted with financial management, this frees up your time, which you can then devote to growing your company. This helps your workers become more efficient and productive as well. You’ll be able to add value to your business, improve employee productivity, and focus on business growth, instead of focusing on financial management.

Conclusion

Fractional CFOs can assist big and small businesses alike. With the help of a fractional CFO, you’ll be able to tackle the financial challenges that your business might face. This guide helps you learn who a fractional CFO is, as well as why you should hire one.

Top Financial Services Offered by Accounting Firms for Artists

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As a freelancer or an artist, you spend a lot of time contacting clients and working on various projects and their respective deadlines. Often the clients demand more than what is offered, and you need to keep working on the changes. With such frequent scenarios, it isn’t easy to focus on other aspects of your work, such as your finances. Finances and bookkeeping are crucial to your work and help you understand your growth as a professional artisan or freelancer.

Financial management is not easy unless you are great with numbers and economics. It requires well-trained methods of organizing documents and going through information to see how you can save money and taxes, which is something professionals help you with. Their experience over the years enables you to pay what you owe as income tax and also learn about the deductions you are entitled to.

When you hire a professional to help you with your finances, you can easily manage the other aspects of your life and balance your work and personal time. You could use this time to relax or to focus on essential things such as marketing your work and investing time in creating your next masterpiece. There are various services offered by accounting firms, such as bookkeeping for artists, that you can benefit from. Here are a few of the services provided by accounting firms.

Bookkeeping

It is the most common service offered by accounting firms. It involves going through various transactions that the client has made through their business account and the valuation of the business to understand where the money was used. Every client may have a different portfolio, and it is essential to know which one was used to evaluate the client’s overall income. They do this all while making records for future reference.

Accounting

Similar to bookkeeping, accounting includes identifying the transactions made, keeping a track or record, and evaluating the business. The only difference with this service is that it also includes interpreting these records. The interpretation helps to understand if the client has been profiting or not. It also lets artists understand if their work is growing compared to the previous year or month.

Tax Planning

For every tax season filing your tax is the most dreaded task that one is on the verge of avoiding and skipping. But doing so will not only lead to you giving more money but can also lead to legal issues. Here professionals can help you take your workload and prepare the tax files and documents needed.

Accountants need transcripts of the money flowing in and out and their various reasons to see if some of them can be written off. Apart from that, the tax laws are known better to professionals in the same field and can benefit you by saving time, effort, and money.

Final Thoughts

Bookkeeping for artists or any other service can help you focus on the central part of your work which is delivering the product or service. Find professionals because they work efficiently and keep the records organized and easy to understand. 

How to Protect your Family from Inflation

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Prior to the announcement of Liz Truss’s new energy policy (which is set to come into play from October 1st), the average household energy bill was expected to increase by 82% at the beginning of the autumn. However, the decision to freeze the energy price cap at £2,500 per annum, all UK households have seen their financial prospects improve in the short-term, with those on variable tariffs expected to see their bills rise no more than 27% in total.

This will have a significant impact on inflation in the UK, with Truss’s teams arguing that the new policy could shave 5 percentage points of headline prices. But what’s the new state of play regarding inflation, and how can you safeguard your family from its worst affects.

Then and Now – The Outlook for Inflation

Inflation began to rise steadily at the end of 2021 against the backdrop of various supply chain issues, but Russia’s invasion of Ukraine in February restricted the supply of oil and energy on a global scale. This occurred as demand was soaring, creating a scenario where prices peaked and inflation began to grow out of control. Incredibly, inflation hit a 40-year high of 10.1% in July, while the prospect of additional energy price hikes in October and January was projected to trigger a further hike to 18.6% in the New Year.

However, inflation dropped a couple of points to 9.9% in August, as it became clear that oil and wholesale gas prices weren’t rising quite as high as first thought. Similarly, the Bank of England (BoE) has revised its forecast in the wake of the new energy policy, suggesting that inflation was moving beyond 13% and may have already peaked early in the summer.

How to Cope with Inflation and Protect your Income

While the economic portents may have improved for now, it should be noted that inflation remains close to double figures in the UK. At the same time, there remain concerns about the wider economic impact of Truss’s economic policies and how they’re going to be funded, which will also weigh heavily on inflation and the cost of essential items such as food and drink. But how can you cope with high rates of inflation and optimise the value of your income? Well, one of the best options is to create additional income streams, ideally those that are passive in nature and capable of being integrated into your existing schedule.

For example, leveraging speculative investment vehicles like forex can deliver returns without requiring you to assume ownership of the underlying assets, creating far greater opportunity regardless of the wider economic climate. You may also note that savings rates are rising in the UK, as the BoE continues to hike the base rate as a way of naturally combatting inflation (these two macroeconomic factors have an inverse relationship).

This may afford you the chance to identify savings accounts with significantly higher yields. This provides a risk-free store of wealth and enables you to accumulate wealth consistently, although it’s important to seek out savings rates that are capable of beating inflation over time.

Why an Expense Management Software is Crucial for SMEs

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Managing expenses is necessary when running a business. It involves implementing necessary policies and procedures to track expenditures or costs, such as funds used for marketing, travel, utilities and rent, and insurance.

In the past, businesses relied on manual processes to manage expenses. With the advance in technology, they now use practical tools, such as an expense management software.

An expense management software is a kind of application that lets finance teams manage expense reports, travel requests, and reimbursements. It also allows employees to handle and record their business expenses. In simple terms, it’s a tool that helps automate every aspect of business expenditure to address issues associated with manual or traditional expense management, including delayed employee reimbursement, unclear expense policies, and poor expense visibility.

In fact, using this software is one of the types of expense management. Expense management involves tracking employee spending and figuring out how your company will reimburse the costs. So, without it, you won’t be able to distribute reimbursements accurately and efficiently.

Small and medium-sized businesses face many challenges, one of which is the inability to manage their expenses effectively. But with expense management software, they can categorize and identify expenditures, such as those for mileage and office.

Keep reading to learn more about how SMEs can benefit from using an expense management software.

To Improve Employee Productivity

One of the benefits of expense management software is that it can help save time, thereby improving employee productivity. Through the use of this tool, employees can log all their expenses instead of filling out reimbursement forms. Plus, they’ll feel reassured about organizing their reimbursements.

To Minimize Errors

Whether you’re an SME or an SMB, keeping track of your finances is paramount to achieve success. It enables you to understand the performance and financial position of your organization. Hence, you should avoid mistakes.

Unlike an expense management software equipped with automation features, manual expense reports lead to delays and inaccuracies. For instance, employees may make several data-entry errors that could worsen when the finance team adds the details to spreadsheets.

On the other hand, an expense management software can identify duplicate entries and errors, as well as put a stop to overpayment or inform managers if the figure seems rather high. It can even send alerts if payment or a report is behind schedule.

Furthermore, data gathered from credit card statements and bank accounts can be merged with corporate travel management systems. Staff members can use their mobile devices to get a snap of receipts and include them in reports with an app-enabled optical character recognition (OCR). Thus, potential errors caused by trying to type on a small screen are prevented.

To Promote Compliance

Another reason why it’s worth investing in expense management software is to promote compliance. It allows your company to follow rules and regulations set by government tax agencies. For instance, by using the software, you can categorize expenses, such as travel, mileage, and office, and tag them accordingly. This is important since some expenses, including dues to golf, athletic, country clubs, are no longer tax deductible. 

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In addition, expense management software provides you with electronic copies of receipts and reports, which are easily accessible and extremely useful in case your company is audited.

To Enhance Operational Efficiency

Aside from ensuring your organization stays compliant, expense management software can help enhance operational efficiency. It can be merged with accounting and enterprise resource planning (ERP), project management, and time tracking software. So, it makes the process of generating accurate, timely reports of employees simpler.

As a result of a smooth process for managers who need to approve and report and employees who need to track, cash flow is improved. What’s more, employees can focus on other projects and tasks that are of vital importance to your company, such as planning strategic budgets and conducting sales calls.

To Implement An Expense Policy

It can be difficult to keep abreast of changes to expense policies and tax rules and regulations. Expense management software can carry out custom rules fit for your business, flagging out-of-policy travel expenses. For instance, because of federal guidelines, per diem meal allowances might have increased. However, staff are still sending expense reports based on the old amount, or an employee may try to request reimbursement for a new addition to the policy, such as an ergonomic keyboard, but is denied.

To Enhance Visibility

Expense management software enhances visibility too since it’s equipped with a dashboard that collates workers’ expense data and conveys it in the form of charts and graphs. With this information presented clearly, managers can check metrics, such as how much your organization spends for each employee or for each category or how long it usually takes to approve expense reports.

To Prevent Fraud

In the past, business owners reported fraudulent activities within their organizations. Finance managers and teams tend to overlook fake entries from employees, including trustworthy ones. Money can no longer be returned after expenses are paid.

Expense management software can reduce and prevent fraud cases by notifying managers if the amount seems exorbitant or suspicious, thereby calling for further investigation before payment is approved and sent. 

To Simplify Reporting

Last but not least, expense management software simplifies reporting. By utilizing this tool, you can combine all expenses into one report.

Aside from consolidating expenses, you can do the following to maximize the software:

  • Motivating staff members to save money
  • Recommending which car rental, restaurant chain, or hotel your company can choose for volume discounts
  • Pinpointing individuals that tend to overspend, repeat policy violators, and expense trends of each employee

All these insights you gain will allow you to determine areas that require spending policies or need clarification.

Takeaway

Investing in expense management software can be a game changer that can help your small business grow. With this tool, your company will see significant impacts, such as reduced errors, cost savings, and a simple expense reporting process.

5 Reasons you Require an Accountant for your Business in Peterborough?

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A staggering 80% of all businesses fail within the first 18 months. It is a sobering statistic that many entrepreneurs are unaware of. The high failure rate is due to several factors, including lack of planning, poor management, and insufficient funding.

Peterborough’s economy is diversified and solid, and local businesses are pushing the boundaries of innovation and sustainability. From cutting-edge SMEs to primary global headquarters, they are expanding.

One way to help ensure success in Peterborough is to create a detailed budget for your business. It is essential to be mindful of your budget. For seeking expert account guidance, you can see these accountants in Peterborough that can provide you with the most satisfactory advice. 

Peterborough is a cathedral city in England and comes under the Cambridgeshire area. The average salary of employees in Peterborough is £30000, while the national average is £31300. In Peterborough, the median wage for females in 2021 was £25300, while the standard is £32400 for males.

The following are some reasons you need an accountant for your business in Peterborough.

To Reduce your Workload

When your company starts to grow, you must devote time to managing day-to-day operations rather than spending it on compliance, taxes, or bookkeeping. Similarly, if your company’s finances become more complicated, you’ll require a professional to manage them.

By suggesting process changes, handling the financial and tax duties, and introducing you to solutions that can assist you in saving time and money, hiring an accountant will help you manage operations.

Provides Smart Business Advice

As business advisors, accountants have the necessary knowledge, abilities, and resources to identify and solve business problems. An experienced accountant in Peterborough will have encountered most of the issues and challenges that businesses face and will be able to offer creative and practical solutions. In addition, accountants have access to a wealth of information and resources that can be used to help businesses make informed decisions. They carry a lot of expertise.

Their network will help you make contacts with influential people who can aid in the implementation of complex strategies and the resolution of complex issues, which will bring additional value to your business decisions.

To Generate Payroll

Businesses that have employees must efficiently manage payroll while adhering to payroll laws. Payroll errors can lead to penalties, disgruntled workers, and astronomical back taxes. An efficient payroll system will help to ensure that all employees are paid on time and by the law.

Working with an accountant familiar with payroll services can be a great help. They can assist you in creating payroll records for your employees as well as documents to submit to HMRC. It can save you time and hassle and ensure everything is done correctly.

To Enhance your Cash Flow

Peterborough city is highly known for its record of profitable economic growth. Between 1995 to 2004, the economy of Peterborough thrived more compared to other areas in England. There are more than 26,000 businesses in the region of Greater Peterborough. Cash is the lifeblood of any business. It is the fuel that keeps the company running and enables it to make critical decisions to grow and expand. You will promptly find yourself in a challenging situation without proper cash flow control.

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Experienced accounting professionals help manage the cash flow in businesses. To see these accountants in Peterborough is one of the most crucial steps you can take to ensure your firm’s financial health. A good accountant will help establish reasonable credit control and cash management policies.

To Make you Cost Efficient

As a business owner, you know that even the most basic functions can significantly impact your bottom line. That’s why having an expert accountant on your team is so important. A professional accountant can provide you with a financial map, which can help you make intelligent decisions about where to allocate your resources.

 By reducing business expenses and managing cash flow effectively, you can set your business up for exponential growth.

Conclusion

Choosing an accountant is a business decision and not a lifestyle choice. Investing in professionals or altering how you employ them might produce significant rewards. Those outside the field cannot provide the information and resources that a competent accountant can; hence, it is vital to have an accountant.

Tax Planning Strategies: Tips and Resources

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Business owners want to make sure their taxes are done correctly. They don’t want to be penalized or fined for not filing on time. In an ideal world, taxes could be part of the equation without requiring too much energy. In reality, this is not the case and a lot of time is spent on taxation and accounting duties. Income tax, for instance, is a large expense for most businesses and individuals and requires careful planning, monitoring, and budgeting.

However, it’s possible to stay on top of your taxes and manage their effect on your finances by using reputable tax services. These services help businesses and individuals navigate complicated tax laws with confidence and a good strategy. When you understand your taxes, you can make more informed decisions about how to manage income, debt repayments, and other obligations.

Here are six helpful tax planning strategies that companies and individuals can implement to get a financial boost.

Properly Plan your Cash Flow

Thanks to the economy’s frequent upturns and downturns, most businesses take on both positive and negative cash flow high points. Tax bills can put a strain on a business or household’s budget, which is why it’s important to learn about how to prepare for them.

When you plan out your cash flow and anticipate your tax deadlines, you can make sure that the ride is both enjoyable and predictable. By doing so, you’ll be able to focus on more critical aspects of your business.

For example, it is necessary to be aware of what the tax implications are for you, your company, and your employees. If you are considering taking on a new project or expanding your business, it is vital that you consider what the tax ramifications might be and if you have any options for reducing them.

Business Property Deductions

In general, the IRS allows businesses to make deductions for property taxes that they don’t own but pay. However, the company must have some kind of equity or title to the property to make these deductions. Home office and home business expenses typically fall into two categories—fixed expenses that can be deducted each year, and variable expenses whose costs will vary from year to year, depending on the size of the business.

For instance, businesses may save a lot of money using a privately owned vehicle. It allows for the expenses of that vehicle to be deducted from their taxes without having to worry about whether they are appropriate or not. But the number of miles you can deduct from your taxes varies from year to year.

Establish your Annual Tax Plan

Tax planning is a short-term effort to reduce your taxable income. Identifying your short-term tax plan earlier in the year allows you to implement decisions all year long and not just at year-end. Short-term planning will help you think about what you can do today to help you get closer to your long-term goals. It’s necessary because large tasks don’t happen overnight.

Engaging your investment adviser in consultation can help them provide the business advice you need, and help you achieve your goals.

Advanced Tax Planning Strategies and Tips

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When it comes to tax planning, some benefits occur long after the current tax year. These payoffs will still be experiencing their benefits even after the government lowers its taxes in the future. However, you can use a few advanced tax planning strategies to reap these rewards.

  • Property Investment: Businesses that have been around for a long time and those who have had their name stitched on their building for generations, get to avoid paying taxes for years. But you need to be classified as a real estate professional by the IRS if you want to enjoy these benefits.
  • Business Purchase: A business can take advantage of legitimate deductions without any additional paperwork or difficulty, making for a more profitable company overall.
  • Roth 401(k): A Roth 401(k) can be used in ways that don’t apply to a Roth IRA, such as investment of appreciation in securities or income generated by rents.
  • Smart Qualified Plans: Businesses can save on operational costs by using a retirement plan like a SEP. These plans allow not only for tax-deductible retirement plans but also allow for a much larger annual or lifetime contribution limit.

Final Thoughts

Proactive and timely tax planning is a safe way to reduce risk and protect your financial investments. You should always make sure you know what the rules of the game are so that you can play it well. Make sure you consult with your adviser throughout the tax year to save time and money. This will result in a more efficient process for all involved parties.

Taxation on Capital Gains in the U.S and Around the World

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Any profit made through the sale of a capital asset (such as a house, stock, or bond) is subject to capital gains tax. You will have a capital gain if the sale price of your asset is higher than your purchase price, and a capital loss if the sale price is lower.

Forgetting to consider the capital gains tax in particular may be a costly mistake when making investing decisions. After all, it might be difficult enough to choose the correct stock or mutual fund without having to consider after-tax returns. Similarly, calculating the tax consequences of selling a house may be a stressful ordeal in and of itself.

Capital gains income has traditionally been taxed at far lower rates than regular income, such as salaries, tips, unemployment compensation, gaming winnings, and the like. That’s because most politicians consider capital expenditures to be a vital economic stimulant and growth engine. The lower tax rates are meant to promote this positive behavior. Capital gains are treated favorably in many situations, not just in the purchase and sale of stocks and bonds. In this article, we’ll discuss taxes on capital gains in the US and other countries.

The U.S.

The federal government of the United States has multiple tax brackets for various forms of income. For example, if you sell a stock that you’ve owned for a while and made a profit, your capital gain will likely be taxed at a lower rate than your wage or interest income. Some forms of investment returns, however, are given preferential treatment. Short-term and long-term capital gains are taxed at vastly different rates. To be a successful investor, knowing the capital gains tax rate is crucial.

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For most people, the maximum tax rate that may be applied to a net capital gain is 15%. If your taxable income is less than $40,400 for a single person or $80,800 for a married couple filing jointly or a qualified widow, you may be eligible to have all or part of your net capital gain taxed at 0%. The same rules go for taxes on gains from FX trading, which allows people from the U.S. and around the world to get profits with currency trading.

It should also be stated that the holding period determines how profits or losses from the sale or purchase of an asset are to be treated. Short-term capital gains are earnings on the sale of an asset held for a year or less. Conversely, long-term capital gains are realized through the sale of an asset that has been held for more than a year. Short-term and long-term capital gains are often subject to different laws and tax rates. Long-term capital gains often incur lower tax rates than their shorter-term counterparts. Similar criteria are used to classify capital losses as either temporary or permanent.

European Countries

Compared to the U.S. it should be stated that according to the EU regulations, the capital gain taxes are much higher. With a maximum rate of 42%, Denmark has the highest capital gains tax of the countries considered. At 35.2%, Norway’s top rate of capital gains tax is the second highest in the world. After that comes Finland and France, with respective percentages of 34 and 33.

The sale of long-held shares is not subject to capital gains taxation in a number of European nations. Belgium, the Czech Republic, Luxembourg, Slovakia, Slovenia, Switzerland, and Turkey all fall under this category. Greece and Hungary have the lowest rates of all nations that do impose a capital gains tax, at only 15%.

It should also be stated that if shares are kept for more than a year and are not used in the taxpayer’s company, they will not be subject to capital gains tax in Slovakia.

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Germany no longer taxes interest income from foreign investors. Bank account holders’ anonymity is protected in this nation. Corporations that do not have a permanent U.S. location are not subject to federal income taxes on any international earnings, including dividends from foreign subsidiaries and profits from foreign branches.

Companies, interest, and licensing revenue all have relatively favorable tax treatment in the Netherlands. In addition to that, in 2019, the Netherlands received $84 billion in FDI, more than any other European country.

Many Germans choose to keep their money in Austrian banks because they provide account holders anonymity in return for their money. Foreign investors have found success in Austria’s bond market. The country’s strict banking secrecy led to its position as number 36 on the Financial Secrecy Index. For American corporations, the Netherlands looks to be the most popular tax haven, with more than half of the Fortune 500 maintaining at least one subsidiary there. Due to its favorable tax environment for international corporations, the Netherlands has seen a surge in the number of company headquarters and subsidiaries based there.

Accounts Payable Automation: The Definitive Guide

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Accounts payable form the core of the day-to-day tasks of the accounts department in any business. Traditional AP processes can drown your employees in endless paperwork and redundant manual invoice reconciliation tasks. The manual process is not only tedious, but it’s also prone to human errors, which can slow down business operations and hinder growth.

Unlike in the past, when automation was a reserve for the best-performing businesses, many companies are adopting AP automation to address accounts payable issues. The technology streamlines the entire process, enhances employee productivity, and fuels business growth.

What is Accounts Payable Automation?

Accounts payable automation is the process of using advanced software to automate repetitive invoicing tasks and eliminate human error for better accuracy and convenience. The software integrates with your accounting software to ensure a hands-free, paperless and efficient process.

There are numerous reasons why businesses are adopting accounts payable automation. The technology solution ensures higher productivity, time, and cost savings and eliminates inconvenient errors. Once you streamline and automate your AP process, you can ensure your business gets timely payments from creditors.

While automation is more prevalent in physical tasks at the industrial level, data-centric tasks can also become monotonous. Accounts payable automation can make the tasks more efficient and ensure reliable results. However, different organizations require a specific solution to address unique AP needs. While the technology has similar benefits to companies across different industries, there isn’t a universal solution.

How Accounts Payable Automation Works

AP automation software basically converts supplier invoices into digital images that can be processed with optical character recognition, pattern recognition, and machine learning to remit automatic payments to suppliers.

The AI-powered digital workflow improves accuracy over time. Various ledger codes and approval routing processes act as the benchmark for the AI tool to improve payments efficiency by pivoting on previous experience. The automation solution’s objective is to eliminate repetitive, manual, and tedious human involvement to facilitate a fully-automated payment process.

Benefits of Accounts Payable Automation

Invoice processing and supplier payments are vital business aspects that organizations seek to streamline. Automating the accounts payable process is a worthwhile decision for any business. Automation has become a top priority for business leaders across different industries in a digital-driven business landscape.

AP automation is transforming invoice handling, payment remission, and managing a surge in accounting backlog. While various businesses have different reasons for implementing AP automation, the benefits cut across the business landscape:

Minimize Errors

Conventional accounts payable processing is prone to human errors with negative financial and reputational consequences. When the process relies on a manual spreadsheet with multiple editors at different levels in the finance department, a mistake will likely occur.

Research shows that about 36% of organizations have misalignments in their accounting processes. The streamlined process eliminates most manual tasks in the accounts payable routine, leading to fewer errors to ensure smooth and efficient payments.

Speedy Invoice Approval and Payment

Errors can compromise the AP process and delay approval. But with the obstacle out of the way, the accounts payable process becomes shorter and seamless. Most importantly, automation makes detecting and correcting errors easy before sending invoices for approval. With quick approvals, you get faster payment cycles since payment details are automatically captured and sent to suppliers.

Better Control and Visibility

Automating the accounts payable workflow makes it possible for suppliers and vendors to track invoice and payment status at any time. This fosters a sense of transparency throughout the process, giving all stakeholders peace of mind.

The manual creation of spreadsheets and charts to grasp spending patterns and predict cash flow issues can be labor-intensive and uneconomical. On the other hand, automated processes offer real-time cash flow tracking for better decision-making.

Moreover, automation gives your finance department better visibility by providing a comprehensive view of outgoing payments, cash flow, and other vital data. As a result, financial officers can benefit from the systemic overview of business finances and insights on payment status.

Improved Productivity and Efficiency for Better Relationships with Vendors

Automated payables process means that your average invoices that take more time to receive, process, and file, can be handled by software instead of an employee. The scarce human resource can be left to handle other tasks that require human judgment and expertise, such as processing a problematic invoice or other improvement tasks.

Typically, it doesn’t make business sense to direct employee efforts towards routine tasks that can be left to an automatic invoice processing software solution. You can reserve the workforce to handle crises or other efforts that generate more business for the company.

man hand holding in pen and other man is hand touch to laptop

 Improved Record Keeping and Lower Operational Costs

Most organizations dread government audit notices since the process requires the management to gather, organize, and forward numerous documents to the editor. Unfortunately, it’s easy to be caught off-guard, especially when your accounting practices are prone to errors.

Automating your accounts payable processes can help you avoid ugly surprises and the nightmares that come with external audits. Good AP automation software can organize files and notify all stakeholders about transactions that need reviewing or approval.

Choosing the Best Accounts Payable Automation Solution

There are several vital aspects to consider when choosing the best business software to streamline your AP process.

Automatic Invoice Processing

When choosing AP automation software, it’s important to understand the distinct differences between robotic and traditional automation. Traditional automation uses digital tools to eliminate a proportion of human intervention when processing invoices. However, these systems still require some degree of human involvement throughout the process.

On the other hand, robotic automation eliminates any human intervention, thus ensuring a fully-automatic process. Software robots manage all the tools responsible for various tasks with zero human intervention. The software leverages machine learning technology to help the system learn from past experience to enhance future processes.

Typically, robotic AP solutions are more costly than their traditional counterparts. It’s best to review your business needs and determine whether the solution is worth the investment.

Simple and Seamless Onboarding Process

Employees tend to respond and perform better when working with software that offers a smooth onboarding process. Buying complex AP automation solutions can be futile unless your employees embrace the new software. When choosing payroll services for your business, it’s best to select a service provider who values the onboarding process and provides sufficient training for smooth employee transition.

Easy Customization and Integration with Existing Accounting Systems

Integrating the automation solution into your accounting system is vital for simplifying the AP processing of invoices and payments. In addition, it can streamline your bookkeeping process.

Any accounts payable automation software can only be as good as how it addresses your organization’s unique needs. A great solution should facilitate customizable and configurable options, including payment notifications, transaction approvals, and data analysis and imports. Ideally, your business needs should determine the number of customization options your software should have.

Every business should strive to study and understand the inherent strengths and weaknesses in its AP processes. You can then use this insight to choose a software solution that fills the deficiencies.

End Note

Accounts payable automation can be an effective tool for businesses seeking to enhance supplier payment processes and manage company finances better. However, business leaders should take a realistic approach by first understanding their unique needs. After understanding organizational strengths and weaknesses concerning AP processes, businesses can deploy the appropriate AP automation software.

4 Reasons Small Businesses Should Be Working With a Tax Lawyer

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One of the most complex parts of running a business is paying appropriate taxes. Every owner wants to take advantage of as many deductions as possible to save on their tax bills. However, without the right knowledge, many miss out on discounts they didn’t know they could take advantage of.

Working with a professional like the Edina Tax Lawyers experts can help you stay within tax compliance and reduce your tax burden. Let’s take a closer look at a few reasons why small businesses should work with a tax lawyer.

Tax Code Knowledge

The IRS tax code currently has more than 1700 pages. It’s best to hire a tax lawyer who knows the code and is willing to research and apply the laws fairly and accurately. States and the federal government constantly change their tax codes. You don’t want to risk the decision of your case being influenced by outdated information or if you misunderstand the current tax laws. Do you want to risk this? If you hire a tax lawyer who has experience applying these codes to your particular IRS issue, he or she will know how to apply these codes to your case.

Filing Returns

The IRS returns that you need to file can also be handled by your tax law firm. If you need to make changes to some information on your tax return for this year, then you may want to contact a lawyer to help you file an amended return quickly and efficiently. In order to request an extension from the IRS, you will need to have your attorney fill out the necessary paperwork.

In addition to ensuring that you submit your tax returns on time, your counsel can also ensure that your proof of income is submitted on time in addition to your tax returns. If you need 1099s, 1098s, W-2s, or other income documents, you can let your accountant take care of that.

Intermediary

It can be intimidating to contact the IRS by letter or telephone. If you do not know what information to give to the agent assigned to your case, there may be questions you do not know how to answer. Your tax lawyer should handle all communications with the IRS so you do not incriminate yourself or accidentally give false information to them. Phone calls, letters, and other communications can be handled by your lawyer. It is your lawyer’s responsibility to ensure that all information you provide is accurate and factual.

Asset Protection

Lastly, your tax attorney will know how to protect your income and assets. It is possible for the IRS to place a lien on your assets and/or garnish your income if you owe them money. The following are some of the ways in which a tax lawyer can help you protect your finances:

  • Making arrangements with the IRS for a payment plan
  • Achieving a debt settlement through the use of an Offer in Compromise
  • Request Currently Not Collectible status for your debt
  • Credit cards, ACH withdrawals, money orders, or another method can be used to pay your debt

You can protect your income and assets from garnishment and seizure with all of these payment and settlement options. By taking these actions, you may be able to remove garnished wages or release liens already placed on your assets.
In order to recover your tax debts, the IRS may pursue you for recovery. These five benefits will ensure that your tax return stays out of IRS trouble when you hire a professional tax lawyer.