Accounting & Taxation

If you’ve decided that it’s time you engaged an accountant for your business, then it’s time to look at who would be the right person for you to work with.

Having someone confident, qualified, experienced and capable is essential to oversee what is, after all, one of the most vital areas of your business because maximum revenue equals maximum survival rate. Which didn’t used to be such an important matter, but if there’s one thing that the COVID pandemic has taught us, it’s that smaller businesses are typically going to struggle to stay afloat. Which is why having an experienced, savvy accountant on your side is the best way to protect your business. The right person will be saving you both time and money year after year.

Carrying out careful research is imperative to make absolutely sure that you’re choosing the best person for your business – there are all different types and what works for one business might not work for another. So, go through the selection process carefully and make sure that you consider all of your options. For example:

• Are you confident that they can reduce your business taxes?
• Where are they based?
• How big is their firm? Big isn’t always better, but it does indicate experience and probably expansion to a certain degree.
• What type of accounting software are you hoping to use?
• How expensive will they be?

1. What about their location?

This isn’t as important as it once was. It used to be that a local accountant was necessary for face to face meetings and taking with you to visit clients, but times have changed and proximity is not so much of an issue now. A lot of business can be carried out remotely through online collaborations and managing your business through cloud-based technology.

This means that no matter where you are, you will be looking at real time, identical data, at the same time. Plus, moving towards remote collaborations means that the field of choice for you in terms of choosing an accountant opens up dramatically and gives you maximum flexibility to hunt and seek the right person for your own business. It doesn’t necessarily matter where you are in the world, for example, so you can select the accountant who suits you best, rather than relying on the five accounting companies that your town might have available.

 Again, the last year or so has meant that as we moved to mostly remote working, it has honed, refined and massively advanced things like videoconferencing, emailing and using accounting software. However, if having face to face time is important to you then you’ll have to stick with your local options, or find someone who is prepared to travel to you on a regular basis.

2. Taxes?

It goes without saying that your accountant will need to be an expert in the tax laws that are applicable to you. These can sometimes be tricky waters to navigate and having someone who is on top of the relevant taxes for you is essential.

3. Their expertise

Do make sure that you check out their expertise in your particular field of work, because not all sectors have the same requirements. Look at whether they have experience with businesses that have a similar revenue and size to yours. Plus, looking at whether they have relevant knowledge and wider experience in your market sector is a good indicator of whether they could adequately handle an expansion in your business.

Basically, the more experience the better (if you’re near the Northwest of England, I can personally recommend Daniel Sam Bolton accountants). Have they worked with larger clients? If so then it shows that they could cope with the growing demands of your business as it gets bigger over time. You could even look at their client list and their individual growth to give you a better idea of how the accountant has worked for them and whether that translates into good business practice for you.

4. Qualifications

You almost certainly will need someone who is chartered or certified, regulated by a professional body and/or recognised by the government. Not only will this speak volumes about their qualifications, it also gives you redress if something goes wrong. Chartered accountants are generally highly experienced, they will have completed post-degree study, as well as a professional competency programme.

5. Finding the right person

Take advantage of what could be right under your nose, in terms of social media and professional connections. Obviously, steer clear of things like Facebook and Instagram, but LinkedIn for example is a great, business orientated platform where you can explore any existing connections you might have or those of people working in the same market sector as you.

6. Think about your exact needs

If you’re a smaller outfit, or you just need someone to book-keep, do general financial management or prepare the taxes, then someone less qualified could be the ideal solution for you. 

Ultimately, once you’ve found a likely candidate, you should consider:

• Are they interested and enthusiastic about their services?
• Do they have a strong network of professional people to engage with?
• Do they have any published recommendations from either previous or current clients? If so, what are the details?
• What is their length of experience in the accounting field and what did they do before they started practicing as an accountant?
• Exactly what qualifications do they have?

Putting in the work now could mean that you find a perfect candidate for the role and your business thrives, going from strength to strength and you can maximise the potential revenue.

The idea of outsourcing certain business needs and requirements isn’t new – in fact, a lot of businesses have been doing it for years, even decades. Outsourcing your business’s accounting can give you plenty of great benefits, including savings on your overhead expenses, no more headaches when it comes to contributions for employee pension and National Insurance, no sick leaves and holidays, and access to a superior team of experienced accountants. But you may already know this – so the next step would be to choose the accounting firm with whom you would like to work. There are many out there, but not every firm will be a good fit for every business.

Here, then, is how you can choose an accounting firm to help your business: your step-by-step guide.

1. Determine the accounting responsibilities you would like your chosen accounting firm to handle – be it basic bookkeeping, tax returns, business plans, credit control, and so on. Make a list of the level of expertise you are looking for, and decide on your requirements based on the kind of business you have as well. Are you looking for the full package or a specialist service? Once you have decided on this, you can narrow down your choices and only meet or speak with those who can deliver.
2. Research the various accounting firms that are suited to your business based on the type of company you have, your business’ size, and your needs. You may want to do research depending on where you are as well, especially if you want your chosen firm to be nearby. If you are in London, for example, then you can search for central London accountants such as those from the highly-respected firm of www.gsmaccountants.co.uk.
3. Get quotes and relevant information and details from potential accounting firms. During this process, it would also be wise to check for reviews about the firm online so you can get a better sense of their expertise, reputation, and service level and support. Remember to ask about the firm’s qualifications and accreditation. Accountants are not generally required to have qualifications, but if you want someone who is qualified, ask them if they are members of a UK authority such as ICAS, ACCA, CIMA, or ICAEW.
4. If you can, try to meet your prospective accounting firm in person – or at least in a video conference. Your prospective firm will usually be your partner for the long term, so it’s best to make sure you have a good connection with them. It’s also important to ask them questions and voice out your concerns so you can gauge their skill and expertise from their answers.
5. When you have already selected the accounting firm you would like to work with, make sure to carefully review the terms and contract. The fees should work according to your budget as well, and ensure that the contract includes all the services they will be providing.
6. As soon as you have come to an agreement and signed the contract, provide the firm with whatever information they would need. Some common documents would include bills, bank statements, receipts, invoices, purchase orders, and credit notes. If this is your first time hiring an accounting firm, they can guide you through what you need to provide and present you with a checklist.

Are you planning to form your own business? If yes, you might be familiar with LLC and LTD. You see, LLC and LTD are different entities, but there’s still a large difference between the two. One main difference is that LTDs pay tax, but LLC doesn’t. Before you choose your path- it is best to consult with a business expert to help you avoid mistakes

Before we go the difference between LLC and LTD tax, let’s first talk about their meanings:

What Is LLC?

LLC or Limited Liability Company is under state law. LLC members are simply called “members.” When you’re an LLC member, you can file your personal tax return. We call this “pass-through taxation,” wherein the company’s net income goes to the LLC then to the members.

Note: LLCs aren’t taxed, but some states may impose a tax to a partnership or corporation. Members of LLCs enjoy benefits such as no annual meeting and recording requirements. LLC doesn’t allow its members to dispense stock.

Here are other benefits of being an LLC member

Member Protection

Don’t worry about debts and liabilities because LLC wouldn’t give you that headache. LLC protects its members from any debt or liability through member protection benefits. As an LLC member, you’re allowed to participate in any operation of the company or assign tasks to managers. All LLC members get liability protection regardless of the tasks they’re doing in the company.

Personal Liability Protection

When it comes to a limited partnership, limited partners have liability protection. But the general partner doesn’t have similar protection, and he or she is responsible for the actions of the limited partner.

The limited partner isn’t allowed to engage in any business transaction of the general partner because of the limited partner’s loss of liability protection. Also, the limited partner would be accountable for the general partner’s actions.

Keep in mind: The limited partner acts as a silent partner and can contribute money, but the partner isn’t allowed to participate in business transactions.

Series LLC

You might hear of Series LLC if you’re living in Delaware. Well, Series LLC is present in some states that improve your liability protection and also helps protects business assets. The assets of your LLC pass through small business entities that we call “Series.” The series company is managed differently from your main LLC or company.

If you plan to create a series LLC, Delaware is one of the best states to start your business. Other states such as California and New York have strict rules in constructing Series LLC. The laws on these states might be unfavorable to your company’s growth. 

What Does Ltd Mean?

The limited abbreviation Ltd doesn’t refer to a single business entity as most people thought. Ltd. represents different entities such as C and S corporations.

If you’re living in the European Union, you will notice that most businesses there are Ltd.  But the EU holds certain laws that govern the amount of shareholders a company could have.

LLC and Ltd – The Difference

Structuring your business isn’t easy. You need to give time and effort so that you don’t face big hassles in your business endeavor. One of the first things to consider is the difference between limited partnerships (Ltds) and liability companies (LLCs).

Since both LLC and Ltd Tax come from state law, most people think the entities are similar. Well, yes in some point, but there are still differences 

Main Differences of Liability Companies and Limited Partnerships

• Tax of the company
• Liability of the entity owners
• Number of shareholders

Limited partnerships are present in commonwealth countries. Limited companies are considered as distinct entities that means the companies are legally separated from the shareholders and the owners.  The company shares are restricted to some people, such as the founders of the state.

LLC often reflects unincorporated associations. Liability companies and corporations share essential characteristics that you need to know. 

Here’s an example:

Company owners of both liability companies and corporations benefit from liability protection and pass-through taxation. 

Single owners of small businesses choose the limited liability company because of the benefits they can get. A limited liability company can select how the company is taxed:

• Single business owner
• Partnership
• S corporation
• C corporation

If you’re in a limited partnership, you and your partner should decide if the business should be taxed separately or taxed from the tax returns of both partners.  Partners often choose the latter because the company wouldn’t be taxed twice.

Structure Flexibility        

The structure flexibility is also different between LLC and limited partnership. A single person can manage a limited liability company, while a limited partnership (as the name suggests) requires two people to manage the entity.

Hence, solo business owners often structure their small business on LLC.

Taxes and Shares

A limited partnership has variations in tax-paying, while limited liability companies are flexible when it comes to taxes, unlike corporations.

For example:

Companies that are under the “C” corporation category are taxed as single business entities.  Shares of entities often remain private rather than in public.

Shares of Ltds are used to choose members of the entity or select the co-founders. If a share isn’t issued, a pre-authorization is required. The share transfers are often in a private agreement. But there are also occasions that the transfer is online.

Pros and Cons of Corporations

Besides LLC and Ltd, you can also structure your business from a corporation. But keep in mind that there are advantages and disadvantages of forming a corporation structure.

One big advantage is you can attract investors by issuing the company shares. Corporations also have the advantage of lowering taxation by splitting the company’s income.

When it comes to the disadvantages of corporations, taxes are a big example. For example, A C Corporation can face double taxation because the company’s earnings are taxed directly and shouldered by the entrepreneur’s tax return.

Another drawback is owners of corporations need to follow strict formalities such as shareholder meetings. Corporation owners only have 100 shareholders that limit the company’s growth.

So, what do you think? Are you going for a LLC or Ltd structure? If not, you might consider growing your small business into a corporation.

Give it a try now and become successful in the future!

Merchant servicing is one of the branches of financial services widely used for business purposes. It is a service that enables businesses to accept transactions or payments through an encrypted and secure channel using the customer’s credit/debit card or any other NFC/RFID-enabled device.

Usually, the merchant processing fee is considered to be an added cost of doing business. Merchant and credit card processing is a significant business expense. It is also tough to comprehend due to the lengthy statements, unclear rates, and endless fees attached. One should be fully aware of the gimmicks and typical games played by the merchant service providers.

One can save much more on merchant processing overcharges by implementing a merchant processing audit. There are many things that you might overlook in your transactions, but a third-party audit can give your business various advantages such as:

1. Team of Professionals

Having merchant processing auditors gets you a team of professionals who are there for financial help. They have in-depth knowledge and relevant experience in their field. It is almost impossible to go through every past transaction or statement. It is also tough to calculate the fees and find out at which point you or your business are paying extra. 

Having a team of professionals can help you track the merchant processing overcharges and inform you in case of any discrepancies in your transactions.

Professional auditors are aware of the credit card companies, their work processes, and how they make profits. Also, subsequent negotiations are done to reduce credit card processing fees. 

2. Continuous Monitoring 

One can have a reasonably large business where many transactions occur during the day, and there can also be more than one source of payment. In such a case, the bills would pile up into massive statements which are left unattended. If you have a merchant processing audit expert, this can be easily handled.

The auditors look at the many factors that affect the merchant account fees, which can be very confusing for busy business owners or managers. This monthly audit will also help you to highlight any other overlooked faults. Now, all your merchant processing problems can be handled hassle-free and in one go. 

3. Hidden Fees

The most important task of a merchant processing auditor is to highlight any hidden costs. These transactions always are associated with an additional fee, and they might keep adding up without you even realizing the same. Your auditor can keep a check on the merchant accounts and also on their interchange rates. The fees can be reduced by negotiating the interchangeable rates and cutting the average spending method per month by at least 20% to 30%. This can eventually help you save a lot on your pocket.

4. Advisory and Consultation Services

Once you connect with your merchant processing auditor, he/she can consult you from time to time and suggest ways to save money in the future. These basic tactics can genuinely benefit you and your business. They can help you restructure the best rates that are available among your current processor or banks. They tend to ensure continuous savings and also guarantee that such excessive merchant processing fees shall not return. 

5. Customer Services

All of the prominent merchant service processors often offer 24*7 customer and tech support at no extra charge. Ensure that whenever you are stuck in such a situation, the other side’s representative can help you in the right direction.

But if you have a self-employed merchant processing auditor, you need not rely on others. You can have a faster and experienced person at your disposal who would give you the suggestion for your betterment in a fair manner.

Now that you know how to save on merchant processing overcharges, you need to protect your precious business money by getting a merchant processing audit expert. Start today to get the best results!

Sometimes an entrepreneur comes across loads of challenges while running a small business, including choosing the right accountant. An appropriate accountant can help you boost up your organization while the inappropriate might cause problems for it. Although there are scads of experienced people needing a job, it’s quite a difficult task to choose the best.

So, when we talk about finding and picking the ablest accountant, we should consider some important rules to reach a closing decision.

Here are the essential tips to follow while choosing an accountant for your small business.

Essential Tips on Hiring an Accountant

Search for the Right Qualification

Finding an accountant with magnified knowledge about tax, business & finance will support you in expanding your business. An ideal option is to seek a qualified accountant with a secure grip on business dealings. For example, you can hire a CPA who will look after your business tax and accounting issues with great ease.

Make Your Business a Priority

Business runs all on the “give and take” system. So never hesitate to ask about the availability from your accountant. It will prove beneficial for your organization if your appointed accountant resolves the business issues on time. Always keep your business on priority.

Choose the One You Personally Like

Another essential factor is your personal liking. Even a qualified accountant for your business can go to waste if you have a communication gap with him. Before reaching a result, always make sure to engage with your new accountant and observe if you can continue working with him or not. There is no point in paying him if you’re not satisfied operating with him. Despite changing the accountants and distracting yourself from your official tasks, why not initially choose the one you like?

Remember That Your Accountant is Your Business Investment!

Every company would prefer deriving the maximum of its budget. Always stay active while choosing an accountant for your small business. Whatever you are spending on business taxes and accounts is no less than an investment, so pick the one leading your organization toward success. It can be done by hiring services of any company like Szweda Consulting.

Always Be Selective in Hiring Process

It has always been a critical situation to hire the fit accountant for your company. Sometimes, even after struggling hard, you get nothing but a misfit accountant. So, always take time and be selective throughout the employing procedure. It’s worth getting life-long advantages from your employee rather than being inconvenient with him on a short term basis.

Utilize Your Social Network to Fetch More Details

You can also use your official apps, like LinkedIn, to bring more of your accountant’s details, such as:

• Are they connected to other professionals?
• What are their discussions about accounting services?
• How do the clients rate them on social media?
• Do they have enough working experience?
• What is the qualification, and do they stand on your requirements?

A Right Accountant Will Let You Touch Skies!

We’ll consider our efforts went well if the above tips and tricks helped you choose an accountant for your company. An accountant plays a leading role to kick start and boost up your business, so always reconsider your preferences and liking. Hire the one you can completely trust on and the one with sufficient tax experience. Make him a part of your business family, so he can comfortably deal with your daily finance issues.

Individuals and businesses use accounting software to record their incomes and track their financial progress. This digital bookkeeping method reduces mistakes and eliminates the chances of human error. Modern features such as automation even allow business owners to calculate their profit and loss electronically.

If you own a small company, you can try some of these programs before investing in one for your company. The selection criteria for our article emphasized that each program has unique features and characteristics.

Benefits of Accounting Software in 2021

The international accounting software market will reach around $12 billion by 2026 since it’s expanding at a growth rate of 8.6% annually. You can try many software versions though finding the most suitable program for your company can be a difficult choice to make.

Every business has different financial demands and software requirements. So, we’ll discuss accounting software programs designed for small businesses after talking about this technology’s benefits.

• It allows simple, quick, and secure data entry.
• It’s a scalable resource for an expanding company.
• It centralizes the data and makes it easily accessible.
• It automates the process of data entry and saves staff costs.
• A computerized invoicing gives you quick reports regarding payments.
• This automation also lessens the chances of manual errors, making data more reliable.
• These programs let you track the inventory and make sure your finances are up-to-date.

5 Best Accounting Software in 2021

Around 38% of business owners disbelieve in the security provided by accounting software. At the same time, 35% of them dislike the expenses of purchasing these tools. On the other hand, less than 20% of business owners admit they’ve found these programs difficult to understand.

Therefore, you must employ people who have a master of accountancy degree and some experience in the field of finance. They can support you with understanding and implementing accounting software such as these five:

QUICKBOOKS ONLINE

With a starting cost of $25/month, QuickBooks gives you an initial 30 days trial period. This software got first introduced in the ’80s, but it released a cloud version just two years ago. It’ll run fine on your computer if you’re using Windows or macOS (in the USA only).

It’s an American product developed by the Mountain View-based company Intuit. You have two versions of this program, one online and the other licensed. It’s cloud-based, mobile-friendly, scalable, easy-to-comprehend, and has extensive tracking capacity. Furthermore, being used by 70% of SMEs, it’s the most popular accounting software in the market. But it has poor customer service and inventory tracking.

FRESHBOOKS

Available in around 12 languages, a Canadian company named 2ndSite built this web-based SaaS model. It was initially released in 2004 and had a starting price of $15/month. Learn that QuickBooks has the highest starting price of all these programs. It’s an affordable cloud-based invoicing solution with a user-friendly interface.

These reasons make it popular among more than 11% of small business owners. This program is an optimal financial friend for those who don’t come from a financial background. However, it doesn’t come without a few disadvantages. Its mobile app is meager, and it offers no payroll service or inventory management. You can bill only five monthly clients.

SAGE ONE

It’s popular among 9.6% of small-to-medium business owners. But Sage One is no longer known by that name. Released by a British company in 2011, it’s 2019 stable release goes as Sage Business Cloud Accounting. It has provided the best customer experience of all accounting software programs.

It allows invoice creation, billing tracking, and even syncs with your bank account. Its low starting price ($10/month) also makes this tool user-friendly and scalable. The inventory management here is of supreme quality, and this program provides you an excellent dashboard view. But customers have found its journal entry difficult, and the homepage can be cluttered.

XERO

Founded in 2006 by a New Zealand-based company, Xero made this product for micro-business owners with little/no accounting experience. This cloud-based program has mobile applications too, and provides an easy-to-manage dashboard. After a 30 days free trial, you can purchase this tool for a starting cost of $11/month.

You can also enjoy payroll integration with Gusto and excellent inventory tracking. This program also gives you more than 500 tools to customize it as per your company’s specifications. That’s why it’s popular among 8.7% of small business owners. But its customer service is limited and provides multi-currency support with an expensive plan.

WAVE ACCOUNTING

Are you a spendthrift?  Well, here’s one Canadian cost-free accounting software for you. It’ll let you create an account for exactly $0 with no hidden charges. However, not all features are accessible in this free version. It further allows multiple users, double-entry, and limitless income tracking.

You also get a clutter-free dashboard without any billing limit. Like other in-demand products we’ve mentioned, you can also download an app to use this program’s features. Its multi-business quality makes it superior to others and popular among 6.7% of SMEs.

Conclusion

Accounting software helps small business owners get a clear understanding of their finances and profitability. No wonder more than 64% of them make use of this remarkable technology.

Most people who don’t use accounting software believe it’s insecure, expensive, and complicated to learn. But the demands of this century have outgrown the human fear of modernity. Your business can’t survive without technology. That’s why you need to switch from manual bookkeeping to digital accounting.

In this modern world, everyone has become dependent on technology. Whether it is buying clothes, booking a ride, or storing business data, people enjoy the benefits of digitalization. As online activities continue to increase, the digital world is exploding with data. Businesses can leverage this data to drive change with positive outcomes and make relevant decisions. After all, making blind guesses or following instincts don’t drive results in the 21st century.

Entrepreneurs have to back their decisions with factual data, facts, and reasoning. Fortunately, data analysis can provide insights into changing market dynamics, letting you make the best decisions to serve customers. It unfolds future trends and evolving customer behavior, allowing you to make futuristic inventions in your products. Similarly, you can determine what forms of advertising reach customers effectively by using analytics.

However, some people back off when integrating data analysis techniques – machine learning algorithms, automation, etc. Indeed, analytics tools have high upfront costs, but their long-term benefits are second to none. Here we are unfolding five ways how data analytics helps businesses in the longer run.

1.   Forecasts Demand With Predictive Analytics

Today, markets are volatile and uncertain, making it challenging for businesses to plan. Predictive analytics uses data, algorithms, and artificial intelligence to determine the likelihood of future outcomes. It delves into past sales and purchase behaviors to detect patterns and assess demand.

Professionals with a bachelor’s degree are now pursuing advanced and specialized programs as per their career propagation interest. Considering the busy schedules, optimizing the work, and learning time has now become inevitable. Thus, if you aim for expertise in this field, go for an online master of science in analytics to develop analytical skills. In addition to forecasting demand, you will learn to perform computational data analysis.

It can assist with new product development decisions. Analytic tools pull in data from social network discussions, marketing databases, and customer relationship management (CRM) software to figure out customer needs. Identifying future trends will help you design a high market demand product, driving sales, and profits. With these innovations, you can also gain an edge over your competitors and stay one step ahead in the industry.

2.   Fosters Tax Calculation

Usually, businesses struggle when it comes to managing taxes. From calculating corporate tax, withholding income tax to collecting sales tax – everything needs a lot of expertise. Similarly, staying on top of tax filing and return dates is no easy feat. Fortunately, data analytic tools help with tax management practices. Firstly, it collects all financial data – fixed assets, expenses, other incomes, and calculates taxes automatically.

Simultaneously, these tools can keep a check on the current status of filings, returns, and pending tax payments. Most importantly, you can predict and calculate the tax payable amount for the coming fiscal year.

3.   Boosts Productivity

Data analysis provides insights on workplace productivity levels in addition to finding what works best for the customers. It ranks employees by quality work they are producing and their reliability. Likewise, these tools also collect data for employee energy, well-being, and weak points. Thus, giving a better idea of how employees work and how to assist them in increasing their productivity levels. Besides this, here some more contributions to data analysis in organizations.

• Shortlists resumes and analyzes interviews of potential candidates, helping with the recruitment process.
• Tracks the real-time impact of employee training.
• Solve payroll errors and glitch in management practices.
• Performs day-to-day, repetitive tasks – booking keeping, sending emails, etc.

Believe it or not, but more and more businesses are using analytics to find ways to bolster efficiency levels.

4.   Creates Mass Personalization

These days, people are giving out plenty of information online. As a result, they expect brands to treat them as individuals. So, why not create mass personalization? Data analysis can help in personalizing email marketing content. You can automate content by creating segments, new leads, regular customers, and different target groups of people. Similarly, if a potential customer has something in his/her shopping cart, send a personalized reminder with a special discount.

Besides emails, consider personalizing the user experience. Use analytical tools to build customer profiles and optimize your website with them. Based on the customer’s interests, the webpage will show ‘recommended for you’ products, increasing conversions. Approximately 74% of marketers approve that targeted personalization fosters customer engagement. Thus, utilize data to design relatable experiences across your customer’s purchase journey and boost profits in the long run.

5.   Reduces Business Costs

Surprisingly, analytics plays a significant role in reducing business costs over time. Firstly, it ensures the effective utilization of the company’s resources, reducing downtime and inefficiency. You can determine the business departments using unnecessary finances and the areas that need funds.

Therefore, you will have a clear idea about where to cut costs. Likewise, analytical tools will inform which advertisement campaigns are not delivering results. Data analysis takes precise actions, filtering all activities that are not adding any value to the business.

6.   Optimizes Advertisement Campaigns

The tech-savvy marketing platforms have given the power to gather strategic data points. As a result, marketers can make better choices, reach out to target audiences, and create campaigns that drive business outcomes. Thus, instead of shooting in the dark, brands can send targeted messages to their potential customers, driving sales. Likewise, data analysis also uncovers strategies to entice customers through value propositions and call-to-action.

At the same time, it measures the performance of marketing campaigns. You can see how many people visit your site, make purchases, open your email, and make amendments accordingly. Data analytics leverages artificial intelligence that helps in streamlining the marketing campaigns. 

Final Thoughts

Nowadays, every business is thriving to keep up in the industry, and data analysis provides a pathway. It enhances the company’s ability to make informed decisions using facts and figures, putting all assumptions aside. Simultaneously, it gives an in-depth understanding of customer needs, which, in turn, establishes loyalty. Most importantly, data analysis promotes flexibility to adapt and react to the changing dynamics quickly. Therefore, instead of basing your decisions on the upfront costs, look at the bigger picture, and see how analytics can help in the long run.

We all are well aware that one of the most challenging assets to manage within any company is its cash. One way to manage cash is for a company to mandate all purchases to be done by cheque. However, there are cases in which the use of a cheque is not practical.

Imagine that the Galaxy’s Best Yogurt is out of milk one day. It is impossible to work without milk, and the usual supply does not arrive for another 48 hours from the distributor.

To sustain the process, it is important to go to the supermarket across the street and buy three gallons of milk. It is not effective for time and expense to write a cheque for this small order, meaning that businesses build a petty cash fund, a fixed sum of cash kept on hand, to make payments for small regular transactions.

A petty cash fund is a form of imprest account, which means that it holds a certain sum of cash substituted as it is expended to retain a fixed balance.

What Is Meant By Petty Cash?

Businesses usually hold small cash sums to cover small miscellaneous expenses, such as entertainment and stationery charges. These transfers are usually done by a petty cash imprest system that fixes the volume of ‘Float.’ This is the full sum of cash that can be kept at any time. Every time the cash amount is limited, a petty cash imprest is inserted with cash by drawing a cheque. The refund’s value must be equal to the cost spent in petty cash from the time of the last refund. Petty cash balance is returned to the level of the float following repayment.

Any time a payment is made by petty cash, it is usually reported in the cashier’s petty cash journal. When a cashier demands the refund of petty cash, he shall create a petty cash voucher documenting the expenses incurred by petty cash during the time after the last refund, along with any supporting invoices serving as photographic proof of the allegation. If all is in order, the approved signer (e.g., the operations manager) draws a cheque equal to the value of the cost detailed in the petty cash voucher.

The Petty cash printing scheme is an easy way to handle minor day-to-day expenses. However, because cash is the entity’s most liquid assets, strict protections are required to prevent potential misappropriation. The following controls can be used for protecting petty cash:

• Petty cash must be stored in a safe location ( e.g., money box)
• Petty cash must be stored safely in a safe while it is not in service.
• The cashier should be responsible for managing supporting invoices for purchases done by using petty cash.  
• Cash counting must be made from time to time to ensure the cash balance in the Petty Cash Registry is all accurate.
• The sum of petty cash float should not be raised significantly.
• Since the Petty Cash List is not part of the double-entry scheme, transfers done through petty cash are eventually placed in General Ledger and the Cash Register.

What Is Meant By Cash Float?

Although paying by credit card, debit, or smartphone pay is popular in many sectors; some people also choose to pay in cash. Getting a cash float, which is the cash you have in the registry to provide customers with change whenever they pay in cash, is a vital business process. If you have a minimal float, you can run out of individual denominations and end up with angry customers. If you’ve got so much float, you may need to make a cash drop amid the day to deter robbery.

The cash float helps cashiers to bring about change for customers early in the day or transfer until a large number of cash purchases accrue to make the change from the day’s sales. Some companies and organizations often regard petty cash as a cash float and use this system to minimize the number of cheques or credit card charges required for small services and transactions.

What Is The Difference Between Petty Cash And Cash Float?

A business seller with a lot of money — apart from the one earned by the business they’re hoping to peddle — may float this money through the operation to make it look like a sale. This raises the apparent worth of the selling and buying price of the company. Cash floating is typically the simplest thing to hide if a vendor has two separate companies. Money can be flown from one company (because there are no taxes charged on the function of that business) to the one sold so that taxes are paid on that operation only.

On the other hand, to set up a petty cash system, the basic sum of money falls from a company checking account. Employees accept cash from the petty cash account, and then each transaction is recorded with a date, number, vendor (who was paid), and business intent. Any transaction using petty cash must be reported in the same manner as all other company profits and expenditures. The petty cash slips and petty cash logs can help obtain these costs so that they can be used to cover revenue for corporate tax purposes.

Conclusion

Summing it up, Petty cash has a lot of control risks involved. If you correctly follow the cash management/security routine, you will be able to keep petty cash under control. Build an approved float. Only set it up for less than a month of expenditures. Designate the custodian to monitor the physical access to the box. Finally, the caretaker must ensure that the cash and receipts complete the float.

As far as the cash float is concerned, to speed up the collection float, you need to compress the time between obtaining cash/cheques and depositing it in the vault. To do this, you should set up a post office box with all invoice payments. This decreases the probability that cheques will be lost in the mail on the way to the office. You can even set up a remote deposit with your bank account. This would encourage you to deposit cheques on the day they arrive, as soon as your accountant or payment clerk reports the cheques in your accounting system.