Basic Accounting

Having started with the income statement yesterday, I might as well continue on with the balance sheet. The balance sheet is divided into two sections, the assets and the liabilities and stockholders equity. This may sound like three sections (and it is), but the point of it being thought of as two sections is illustrated in the following equation:

Assets = Liabilities + Stockholders Equity

Assets being what you have, liabilities being what you owe, and stockholders equity being what you own.

Assets

• Current assets: Assets that are expected to be turned into cash within the next year, including

  • Cash (and cash equivalents)
  • Accounts Receivable
  • Prepaid Assets
• Other assets include

  • Net property plant and equipment (the full cost of your PPE minus accumulated depreciation)
  • Goodwill
  • Other long-term assets, such as deposits, prepaid multi-year licenses, etc.

You total all of these numbers to get your asset total number.

Liabilities

Current liabilities: Liabilities that are expected to be paid within the next year, including

• • Accounts payable
  • Wages and related costs payable
  • Current portion of long term debt (the part of your multi-year loan you expect to pay this year)

  • Other current payables
• Long-term debt
• Deferred tax liabilities
• Other long-term obligations

This is your total liabilities.

Stockholders Equity

The equity is the outstanding shares times the par value plus the paid-in capital. In general, this is sort of an anachronism, Read more

Accounting is the backbone of any business. Right from dealing the financial tasks to the estimation of profit, everything is the sole responsibility of the accounting department. Whether the business is small or big, accounting is one of the most important aspects of a business. Running a business is not a child’s play and it requires a lot of management and expertise. Accounting is not an easy task and it requires a lot of expertise on the part of the accountant or the person who will be managing the accounts of the company. There can be several reasons like heavy workload, less number of accountants due to which you can witness the incapability of your in-house staff. But nowadays, the market is full of such outsourcing firms that are ready to take care of all sorts of account related affairs. One such keen and highly acclaimed organization is accounting New York.

A professional accountant that you hire from an accounting New York firm works towards the profits of the clients whom they are serving. Mis-computing, false or missing entries in the account of the company can lead to an entirely wrong calculation that is performed for estimating the financial growth rate of the year. Proper record of profit and loss has is very important for analyzing the future aspects of the firm. After all, this will decide whether the company is making fruitful deals or going in loss. Accounting New York professionals understand the requirements of your business and according to those; they formulate their services so that you can make the most of it. They scrutinize every detail of your accounts to create the most profitable financial statements.

Hiring a professional from an accounting firm in New York can help you to avoid all the unwanted problems and can help you relax while they will handle the accounting work of your firm. Every professional from Read more

Any business runs on the basis of important contributions from various divisions such as marketing, human resource, information technology, administration and of course finance and accounting. The business undertakes multiple transactions in a single day and it becomes crucial to maintain accurate records of each transaction to arrive at a proper picture of the entity’s financial standing in the market. The records such as the journal, cash books, balance sheets, profit and loss accounts are all various accounts that help the accounts division keep track of the business’s income and expenditure. However, if your business is a start up or perhaps has a small entity then it might get difficult to devote an entire division to maintaining the accounts then perhaps accounting outsourcing is the best option for you. More and more businesses, whether big or small, are going in for this method of maintaining their financial records and the popularity of the process speaks about its success.

Accounting outsourcing is the process of handing over the accounting work of a business to a third party vendor in another country, who handles the accounting work on the behalf of your business. Many countries such as India are offering such accounting outsourcing services to the western countries and that too at a much lesser cost. The economic value of the service is a major advantage for the companies opting for such third party accounting. The professionals hired by the vendor taking the responsibility of your financial records are well qualified to handle such work with great competency and accuracy. As a business owner you can safely entrust your financial records to the vendor and rest assured that the accounts will be maintained in an accurate and efficient manner.

Accounting outsourcing not only saves the business the hassle of regular account mainte Read more

The accounting profession is diverse. For most people a bookkeeper and accountant is considered to be the same. Some clients even refer to their highly trained accountants as their ” bookkeepers”.

This article has no intention to heap scorn on the professional bookkeeper. If anything, their work enables the accountant to prepare and finalize their assignments.
Bookkeepers are found everywhere, from small to large corporations, and in government departments.

I will not touch on the old debate of the differences of the bookkeeper and accountant, suffice to say that there are many synergies between the two professions. Depending on the size of the organizations, a bookkeeper could essentially perform an accountant’s job.

It is on the divergence on the two professions where most of the confusion sets in. A bookkeeper could have performed a vital function for a small business for years, but when professional reports, are required, the help of an accountant will have to be enlisted. Sometimes to the detriment of the loyal bookkeeper.

The training and education of bookkeepers is different from that of an accountant. Some people become bookkeepers without any studying. Others attend short courses at training colleges varying from six months to two years. In certain cases bookkeepers can opt for professional membership. Accountants training is prescribed by many statutory accounting bodies, and their training is substantially more involved, and different from a bookkeepers training.

For bookkeepers to assume that they can run and report on an organizations complete accounting system, is sheer arrogance. Bookkeepers expertise in balancing the checkbooks, reconciling the accounts and other functions is not sufficient. Keeping current with GAAP, GRAP and IFRS, is not known to be strength of bookkeepers.

The training that book Read more

The first thing you do to find a good accountant, is to build a list of referrals form credible sources. To find resources for these referrals may seem like a daunting task at first, however, it is simpler to accomplish this goal then what you think. You can go to such resources such as your local bank, any type of financial planners that you may have, and you can even talk to your current insurance agent about people they know about to be your accountant. If you have any contacts or affiliations with other businesses, then you can ask them for accountant referrals as well. These are all trusted resources that can provide you with some good leads on who you can trust to be your accountant. Finding accountant candidates through trusted resources such as your businesses bank, is one of the best ways to find an accountant. Most professional referrals like this mean that the accountant has a good reputation.

Once you have your accountant referrals, you then want to contact them and exchange information. Feel free to tell the accountant about your business as well as your accounting needs and expectations. While you give the accountant your information, also ask for theirs. Some key things you want to find out is if the accountant can handle a business in your industry and your size, as well as finding out all of the services they offer. Do not be afraid to look at their portfolio and get estimates for their services. Be sure you know what services the fees cover. You never want to select an accountant whose fees are to high for what you can afford. Make sure that you can maintain a good line of communication and determine if they are helpful and informative. The accountant who offers the most detail and takes the most time to not only tell you about the services they can offer you, but also listens to your concerns, is usually the type of accountan Read more

The most popular type of accountants are public accountants. Public accountants has the widest range of accounting, then any other type of accountant. Unlike other types of accountants, public accountants can work for individuals, businesses and organizations, as well as be utilized by government agencies. There is no limit to who public accountants can work for, which is why public accountants are the ideal accountants for job seekers in the accounting field. A large amount of public accountants are self employed with some also working for various CPA firms.

Public accountants also have a wide range of duties. They can be tax preparers, consultants, financial strategists, or work hand in hand with law enforcement agencies in the field of forensic accounting. There is virtually no limit to what public accountants can do. However, there are laws that prevent public accountants from performing multiple duties for the same clients, which is to limit a public accountants power to a single group.

The next type of accountants are Cost accountants also known as management accountants. These type of accountants are used in major businesses and organizations and are essential to the functioning of a business. Cost accountants do not have as many duties as public accountants, however, their duties are of high value and extremely important. Cost accountants are in charge of such things in a business as budgeting, giving continual evaluations concerning the business, it s finances growth and liabilities as well as financial information regarding costs and assets for the company. This is a major role within a business or organization, which is why cost accountants are valued by such groups. Without public accountants, businesses would not be able to survive.

Government accountants are the last type of accountants. Governments accountants have th Read more

The most popular type of accountants are public accountants. Public accountants has the widest range of accounting, then any other type of accountant. Unlike other types of accountants, public accountants can work for individuals, businesses and organizations, as well as be utilized by government agencies. There is no limit to who public accountants can work for, which is why public accountants are the ideal accountants for job seekers in the accounting field. A large amount of public accountants are self employed with some also working for various CPA firms.

Public accountants also have a wide range of duties. They can be tax preparers, consultants, financial strategists, or work hand in hand with law enforcement agencies in the field of forensic accounting. There is virtually no limit to what public accountants can do. However, there are laws that prevent public accountants from performing multiple duties for the same clients, which is to limit a public accountants power to a single group.

The next type of accountants are Cost accountants also known as management accountants. These type of accountants are used in major businesses and organizations and are essential to the functioning of a business. Cost accountants do not have as many duties as public accountants, however, their duties are of high value and extremely important. Cost accountants are in charge of such things in a business as budgeting, giving continual evaluations concerning the business, it s finances growth and liabilities as well as financial information regarding costs and assets for the company. This is a major role within a business or organization, which is why cost accountants are valued by such groups. Without public accountants, businesses would not be able to survive.

Government accountants are the last type of accountants. Governments accountants have th Read more

The main thing you will need for your income tax return is proof of the income you made and the taxes you paid in the previous year. That includes income made through employers, interest from accounts, dividends from investments, income made through self-employment, income made as a subcontractor, and any other income. Student loans and other types of loans may also be considered income for the purposes of income tax, as can winnings from a lottery, casino, or other contest. If you are unsure what can be considered as income for tax purposes, you should contact a certified public accountant.

The other thing that is important is social security numbers for everyone you will claim on your income tax return. That includes social security numbers for your spouse and any children you will claim. Without social security numbers, proof of residence, and birth dates, you cannot claim deductions on your income tax return for these individuals.

The next thing that you should gather is what you will need for deductions. If you have a mortgage, your interest paid to the mortgage company may be tax deductible. If you use a vehicle for business purposes, you can claim a tax deduction for mileage. If you have children in daycare so that you can work, you can claim a tax deduction for that expense. You can also claim tax deductions for excessive medical expenses and charitable contributions.

If you are self-employed, you will need to also gather your receipts for tax deductible expenses. A tax deductible business expense is any expense that is used solely or primarily for the business you are involved in. The tax deductible expense must be documented in order to claim it, so any receipts you have, usage logs for computers and vehicles, etc. should be gathered so that you can take the highest deduction possible. If you have any doubts about what is Read more

The fringe benefits tax (FBT) year end is just around the corner on 31 March 2008.
Ongoing investigations by the ATO show that FBT compliance is not as good as it could be -
so FBT is on the ATO’s audit hit list.

Now is the time to check whether you have provided any fringe benefits to your employees in
respect of their employment that are taxable and make sure you are ready to lodge your FBT
return and pay any FBT liability on time.

We are here to help you make sure that you are making the most of planning opportunities
and that your business is up to scratch when it comes to its FBT compliance.

Checklist of some FBT basics

- The current FBT year runs from 1 April 2007 to 31 March 2008.
- As an employer, you have to calculate and pay any FBT liability.
- If you have an FBT liability, you must lodge your FBT return and pay your FBT liability by
21 May 2008.
- FBT is separate from income tax and is levied at the top personal marginal rate of income
tax, including the Medicare levy (i.e., currently 46.5%);
- You can generally claim an income tax deduction for the cost of providing fringe benefits
and for the FBT you pay.
- Where the total taxable value of reportable fringe benefits for an employee is more than
$2,000 for the current FBT year, you will have to disclose this value (grossed-up) on the
employee’s payment summary.

Checklist of common fringe benefits

The following list benefits is not an exhaustive catalogue of all possible fringe benefits, but
highlights some of the more common situations in which fringe benefits tend to arise.

If you are providing any of the following benefits to your employees, you are probably
providing a fringe benefit and will need to make sure whether or not you have a fringe benefits
tax liability:

- making cars or oth Read more

Making a profitable business is not an easy task. Great effort, sincere dedication, perfect management, accurate sense of timing, intelligent proficiency and many such qualities are united together to create a successful organization. Moreover, it basically requires huge contribution of a plethora of serious and committed employees. Every company irrespective of its size and services has the main motive of making heavy profits and securing a reputed position in the market. And to match this race most of the organizations are taking assistance from the very valuable option of accounting outsourcing services. These services are widely considered to be delivering a convenient approach for handling the business in a more precise way.

Accounting outsourcing services are available in numerous forms and packages to entertain the small, medium and big organizations. However, there will be hardly any task that these firms will refuse to perform. They specialists take charge of everything from record keeping, creation of reports, financial consulting to functional procedures and final assessment. Along with these, they also provide beneficial guidance and advices to the company to tackle their financial issues easily. Frequent use of Internet and software has fiercely boosted the presence of this technique in the world of business. Processing, filing and storing is now a trivial matter of few minutes with the advent of these software. An added advantage with accounting outsourcing services is the fact that the business owner can constantly keep a track of what is going on in his or her accounting department through this technique. All the data and files are delivered to the owner for him to analyze and approve.

Accounting outsourcing services brings to you a more simplified solution that will not only reduce the operational costs of your business b Read more