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Accounting & Taxation

How to Protect your Family from Inflation

Last Updated on October 3, 2022 By Ayesha Saeed Leave a Comment

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.

ayesha saeed
Ayesha Saeed

A happy mom, professional article writer, SEO practitioner, blogger, guest blogger & freelancer. She’s been in digital marketing since 2018. She loves reading books and spending time with her family.

Filed Under: Accounting & Taxation

Why an Expense Management Software is Crucial for SMEs

Last Updated on October 3, 2022 By Ifama Leave a Comment

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.

Table of Contents

  • To Improve Employee Productivity
  • To Minimize Errors
  • To Promote Compliance
  • To Enhance Operational Efficiency
  • To Implement An Expense Policy
  • To Enhance Visibility
  • To Prevent Fraud
  • To Simplify Reporting
  • Takeaway

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. 

animation-and-screen

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.

Ifama

Hi! This is Ifama. I am a student and giving my services in SEO. I have a lot of experience in digital marketing. Travelling is my hobby and I love visiting different hilly areas and doing adventures.

Filed Under: Accounting & Taxation, Management, Technology

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

Last Updated on October 1, 2022 By Ayesha Saeed 1 Comment

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.

Table of Contents

  • To Reduce your Workload
  • Provides Smart Business Advice
  • To Generate Payroll
  • To Enhance your Cash Flow
  • To Make you Cost Efficient
  • Conclusion

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.

cash flow statement write in the register

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.

ayesha saeed
Ayesha Saeed

A happy mom, professional article writer, SEO practitioner, blogger, guest blogger & freelancer. She’s been in digital marketing since 2018. She loves reading books and spending time with her family.

Filed Under: Accounting & Taxation

Tax Planning Strategies: Tips and Resources

Last Updated on September 27, 2022 By Jason Obrien Leave a Comment

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.

Table of Contents

  • Properly Plan your Cash Flow
  • Business Property Deductions
  • Establish your Annual Tax Plan
  • Advanced Tax Planning Strategies and Tips
  • Final Thoughts

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

man hand holding coins

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.

Jason Obrien

Jason is the Marketing Manager at a local advertising company in Australia. He moved to Australia 10 years back for his passion for advertising. Jason recently joined BFA as a volunteer writer and contributes by sharing his valuable experience and knowledge.

Filed Under: Accounting & Taxation

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

Last Updated on September 27, 2022 By Jason Obrien Leave a Comment

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.

man hand holding coins

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.

Toy car with money

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.

Jason Obrien

Jason is the Marketing Manager at a local advertising company in Australia. He moved to Australia 10 years back for his passion for advertising. Jason recently joined BFA as a volunteer writer and contributes by sharing his valuable experience and knowledge.

Filed Under: Accounting & Taxation

Accounts Payable Automation: The Definitive Guide

Last Updated on September 5, 2022 By Jason Obrien Leave a Comment

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.

Table of Contents

  • What is Accounts Payable Automation?
  • How Accounts Payable Automation Works
  • Benefits of Accounts Payable Automation
    • Minimize Errors
    • Speedy Invoice Approval and Payment
    • Better Control and Visibility
    • Improved Productivity and Efficiency for Better Relationships with Vendors
    •  Improved Record Keeping and Lower Operational Costs
  • Choosing the Best Accounts Payable Automation Solution
    • Automatic Invoice Processing
    • Simple and Seamless Onboarding Process
    • Easy Customization and Integration with Existing Accounting Systems
  • End Note

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.

Jason Obrien

Jason is the Marketing Manager at a local advertising company in Australia. He moved to Australia 10 years back for his passion for advertising. Jason recently joined BFA as a volunteer writer and contributes by sharing his valuable experience and knowledge.

Filed Under: Accounting & Taxation, Technology

4 Reasons Small Businesses Should Be Working With a Tax Lawyer

Last Updated on August 19, 2022 By Ifama Leave a Comment

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.

Table of Contents

  • Tax Code Knowledge
  • Filing Returns
  • Intermediary
  • Asset Protection

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.

Ifama

Hi! This is Ifama. I am a student and giving my services in SEO. I have a lot of experience in digital marketing. Travelling is my hobby and I love visiting different hilly areas and doing adventures.

Filed Under: Accounting & Taxation

Capital Gains Tax: What To Know In a Bear Market Year

Last Updated on August 8, 2022 By Ifama Leave a Comment

In a bear market year, it’s more important than ever for taxpayers to know how capital gains tax works. This article will provide an overview of the basics of capital gains tax, including what triggers it, how to report it, and which types of investments are subject to it. Knowing the ins and outs of capital gains tax is critical for minimizing your tax liability in any market conditions. So read on for everything you need to know about this important topic!

Table of Contents

  • What are Capital Gains?
  • What Triggers Capital Gains Tax?
  • How to Calculate Taxable Capital Gain
  • Capital Gains Tax Rates
  • Tax Loss Harvesting and Carryover of Capital Losses
  • Reporting Capital Gains Tax on Your Return
  • State and Local Taxes on Capital Gains
  • Other Strategies for Managing Capital Gains Tax (More Tips!)
  • Work With a Professional CPA and save Yourself headaches and stress

What are Capital Gains?

When it comes to taxes, capital gains are profits realized from the sale of certain types of assets. These assets can include stocks, bonds, mutual funds, real estate, and even some collectibles. If you sell an asset for more than you paid for it, the difference is considered a capital gain. For example, let’s say you bought a stock for $50 per share and sold it later for $100 per share. In this case, your capital gain would be $50 per share.

Capital gains can be either short-term or long-term. Short-term capital gains are realized on assets held for one year or less, while long-term capital gains are realized on assets held for more than one year. Short-term capital gains are taxed at your regular income tax rate, which could be as high as 37% for some taxpayers. Long-term capital gains, however, are taxed at a lower rate: 0%, 15%, or 20%, depending on your tax bracket.

a lawyer calculating tax for the year

What Triggers Capital Gains Tax?

You only owe capital gains tax when you sell an asset for a profit. So if you hold onto an asset until it’s worth less than what you paid for it (known as a capital loss), you won’t owe any tax on the sale. Capital losses can be used to offset capital gains, which can lower your overall tax liability. For example, let’s say you have $10,000 in short-term capital gains and $5,000 in short-term capital losses. In this case, you would only owe capital gains tax on the $5,000 in net gain.

How to Calculate Taxable Capital Gain

The amount of taxable capital gain is determined by subtracting the cost basis (what you paid for the asset) from the proceeds (what you sold it for). So if you sold an asset for a profit of $1,000 and your cost basis was $500, your taxable capital gain would be $500.

Capital Gains Tax Rates

As we mentioned earlier, long-term capital gains are taxed at a lower rate than short-term capital gains. The exact rate you’ll pay depends on your tax bracket. For 2019, the long-term capital gains tax rates are 0%, 15%, or 20% for most taxpayers. However, there is an additional 3.8% surtax on long-term capital gains for high-income taxpayers.

Tax Loss Harvesting and Carryover of Capital Losses

If you have more capital losses than gains in a given year, you can use the losses to offset the taxes owed on the gains. This is called “tax loss harvesting.” Any unused losses can be carried over to future years and used to offset gains in those years.

Reporting Capital Gains Tax on Your Return

All capital gains must be reported on your tax return, even if you don’t owe any tax on them. Short-term capital gains are reported on Schedule D of Form 1040, while long-term capital gains are reported on Form 8949. Be sure to keep good records of all your investments so that you can accurately report your gains and losses come tax time.

State and Local Taxes on Capital Gains

In addition to federal taxes, you may also owe state and local taxes on your capital gains. These taxes vary by jurisdiction, so be sure to check with your state and local tax authorities for the latest information.

Other Strategies for Managing Capital Gains Tax (More Tips!)

There are a few other strategies you can use to minimize your capital gains tax liability. One option is to invest in assets that are eligible for special treatment, such as certain types of bonds or mutual funds. Another option is to wait until you’re in a lower tax bracket to sell assets that have appreciated in value. And finally, you can consider using a professional CPA to help you manage your taxes and maximize your deductions.

Work With a Professional CPA and save Yourself headaches and stress

A certified public accountant (CPA) can help you navigate the complex world of taxes and minimize your liability. CPAs are trained tax professionals who understand the ins and outs of the tax code and can help you take advantage of all the deductions and credits you’re entitled to. If you’re worried about capital gains taxes, a CPA can help you develop a strategy to minimize your tax liability.

The bottom line is that capital gains taxes can be complex, but with a little planning and some expert help, you can keep more of your hard-earned money in your pocket.

Ifama

Hi! This is Ifama. I am a student and giving my services in SEO. I have a lot of experience in digital marketing. Travelling is my hobby and I love visiting different hilly areas and doing adventures.

Filed Under: Accounting & Taxation

3 IT Services for Every Accounting Firms

Last Updated on June 24, 2022 By Jason Obrien Leave a Comment

Cybercriminals consider accounting firms as a top target because of the access these firms have to confidential financial data. Likewise, improving security measures has become a need to achieve the success of any business or company. As such, it can be primarily a fact for accounting firms, so hiring specialized information technology (IT) services should be considered to maintain the security of the business and its customers.

Besides security, other IT services can also play a role in reducing downtime. Your time is important, and each minute spent on fixing IT issues is a minute spent away from doing vital tasks. Remember, your team are accountants and not experts in IT.

Another benefit of hiring an IT service is that it can help your business productivity. Your IT service can take a more proactive role to help you capitalize on the money you provide. They can collaborate with your leadership team to know more about your accounting firm and allow you to leverage your accounting software and technologies that your business uses regularly.

IT services have advantages, it can be good to know some examples of services you can work with. Read on to know more.

woman hand toward the computer and everyone looking the computer

Table of Contents

  • Cloud Services
  • Cybersecurity Solutions
  • IT Consulting Services
  • Conclusion

Cloud Services

Many businesses now realize the possibilities of using the cloud. For example, cloud services allow employees to collaborate on projects by entering meetings from any location. This is particularly helpful if your firm’s employees work remotely or in various places. Likewise, cloud services are highly scalable, giving you the chance to spend money for only the services you need, even when what you need is constantly changing.

There are various types of cloud services. One is a software as a service (SaaS) where it hosts apps and makes them accessible to users. The other is infrastructure as a service (IaaS). IaaS offers you a third-party infrastructure while the third is the platform as a service (PaaS), which includes computing power and infrastructure for things like your operating system and programming languages.

It’s ideal that an IT professional will decide on the cloud service that’ll be good for your accounting firm. Once your IT professional decides which one, the provider will then prepare the service, transfer the data that you have to the cloud, and maybe train your employees to securely and effectively utilize the cloud services.

Likewise, the cloud service provider will go on to provide you with assistance. This will probably consist of responding to errors to minimize downtime, training the staff, checking for threats, and keeping the system.

Overall, if you want a specific type of IT support for your accounting firm, check IT support Seattle and others online.

Cybersecurity Solutions

To safeguard your computers and networks from cyberattacks, cybersecurity solutions become ideal. These cyberattacks either extort cash, cause downtime to the operation of a business, or both. They do so via stealing, changing, or destroying sensitive data. Spreading malware is one method that cybercriminals use to meet their objectives. Malware can come in various forms such as Trojan horses, spyware, and computer viruses.

man using the computer

Anyone can become a target of cybercrimes, including customers and small businesses. Likewise, your accounting firm can also become one of the main targets of cybercriminals because of its access to sensitive financial data. As such, having cybersecurity measures prepared can hinder vicious programs from entering your network. This makes cybersecurity an IT service that your accounting firm should deem essential.

Since cybersecurity as an IT service can be crucial, you should know how it works. First, cybersecurity experts use malware protection programs. They also regularly check the data that enters and exits your networks. Furthermore, they also track all devices that connect to your network.

In the scenario when there’s a cyberattack that happens, your cybersecurity team will try to reduce its effects. Once they adequately deal with the threat, they’ll conduct data restoration through their backups.

IT Consulting Services

IT consulting is the process of advising on how to apply IT to attain business objectives successfully. IT consultants can offer consulting on any issues that include IT such as:

  • Web development
  • Computer systems analysis
  • Information security
  • Computer network architecture

Because information technology is a crucial factor for business development, IT consulting assists in making innovations closer to the organization for fruitful transformation.

But what does an IT consulting do? First, this type of IT service assists in assessing different technology strategies and then matches them with the business’s strategy. This activity involves building strategic, architectural, operational, and implementation plans. IT consulting offers services that provide a way for a business to assess their IT needs and create a system implementation plan.

This involves advice on how to create a system that can keep up with customer requirements and maintain competition. Moreover, IT consulting evaluates the operation efficiency and capacity of the company’s IT environment.

Conclusion

IT services can be ideal for attaining proper security for your accounting firm and clients. They can reduce the risks of cyberattacks because of their knowledge. Likewise, IT services aren’t just good for maintaining security. They can also be ideal for minimizing downtime from technical issues and can be suitable for maximizing your firm’s technologies.

Various IT services such as those in this article can help your firm’s needs. Overall, take note of them and share them with others.

Jason Obrien

Jason is the Marketing Manager at a local advertising company in Australia. He moved to Australia 10 years back for his passion for advertising. Jason recently joined BFA as a volunteer writer and contributes by sharing his valuable experience and knowledge.

Filed Under: Accounting & Taxation, Technology

6 Ways Cloud Accounting Services Can Help Your Business Grow

Last Updated on May 22, 2022 By Ifama Leave a Comment

Running a business is not an easy task. Aside from ensuring that your products or services are of good quality, you also need to make sure that your finances are in order. Without proper financial management, your business will not be able to grow and prosper.

That’s why more and more businesses are now using cloud accounting services. With cloud accounting, you can manage your finances more efficiently and effectively.

In this article, we’ll discuss six ways how cloud accounting services can help your business grow.

So, let’s get started!

Table of Contents

  • 1. Improved Cash Flow Management
  • 2. Reduced Accounting Costs
  • 3. Improved Financial Visibility
  • 4. Better Decision-Making
  • 5. Increased Security
  • 6. Increased Efficiency
    • Manage Your Finances More Effectively and Help Your Business Grow

1. Improved Cash Flow Management

One of the most essential aspects of financial management is cash flow. With cloud accounting, you can manage your cash flow more effectively by tracking your income and expenses in real-time.

This way, you’ll know exactly how much money is coming in and going out of your business. As a result, you’ll be in a better position to make informed decisions about your finances.

2. Reduced Accounting Costs

When it comes to accounting, businesses often have to spend a lot of money on hiring accounting staff or outsourcing accounting services.

However, with cloud accounting, you can save on these costs as you can do your own accounting. All you need is a computer and a reliable internet connection.

3. Improved Financial Visibility

Cloud accounting also gives you improved financial visibility. With cloud accounting, you can access your financial data anytime, anywhere.

This way, you may always keep track of your business finances and make sure that everything is in order.

4. Better Decision-Making

Another benefit of using cloud accounting services is that they can help you make better decisions about your finances. With cloud accounting, you can track your financial performance in real-time.

This way, you can identify areas where your business is doing well and areas where it needs improvement. As a result, you can make better-informed decisions about where to allocate your resources.

5. Increased Security

When it comes to financing, security is always a major concern. However, with cloud accounting, you can be assured that your financial data is safe and secure.

Cloud accounting providers use state-of-the-art security technologies to protect your data. This way, you may be sure that your financial information is safe from hackers and other cyber threats.

6. Increased Efficiency

Last but not least, cloud accounting can help you increase the efficiency of your accounting processes.

With cloud accounting, you can automate repetitive tasks such as invoicing and billing. This way, you can save time and resources that can be better used elsewhere.

Manage Your Finances More Effectively and Help Your Business Grow

If you are looking for ways to take your business to the next level, cloud accounting may be a good option for you.

Cloud accounting services offer a number of benefits that can help businesses grow and manage their finances more effectively.

By using cloud accounting, you can save time and money while getting access to the latest features and tools. If you’re not already using a cloud accounting service, now is the right time to start!

Ifama

Hi! This is Ifama. I am a student and giving my services in SEO. I have a lot of experience in digital marketing. Travelling is my hobby and I love visiting different hilly areas and doing adventures.

Filed Under: Accounting & Taxation

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