Kenneth Boyd's Blog, page 51
January 23, 2019
The Essential Lowdown On Choosing Investments
Don’t spend it, invest it.
That’s what you should do if you have some cash burning a hole in your pocket!
Of course, deciding where to put your hard earned money can be very confusing, especially with all the different investment options out there. Read below to find out about different types of investments, and determine which are best for you.
Stocks
Stocks represent equity, or ownership in a company.
Stocks work on the basis of risk, with larger, more stable companies in first world markets being less risky than smaller companies, or ones that are floated in emerging markets like India or Mexico.
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While there is investing risk in any stock, you can minimize the risk by diversifying your stock holdings and selecting stocks wisely.
The money that you can make from stocks come from two places. When a business does well, the stock price rises, so every share you have is worth more. The second way is when a company pays out a dividend to its shareholders, meaning a share of company profit.
You can earn both an annual income from dividends and a long-term gain from selling stock for a profit.
In particular, stock prices perform better over an extended period of time, because price fluctuations tend to even out over a period of years. Therefore, if you can leave your money in longer, you are likely to make a better return.
However, stocks aren’t always a good investment for people that are looking to avoid risk, especially if they have little capital that they cannot readily afford to lose.
Bonds
Both governments (federal, state, and local governments) and corporations need to raise capital.
These organizations raise money by selling bonds to the investors, and the bond is a promise that the money will be paid back with interest by a specific maturity date.
Bonds are less risky than stocks, because the issuer is guaranteeing to pay principle and interest to you. However, there is the risk that an issuer may default and not make the required payments. The risk depends on the ability of the issuer to generate cash inflows and manage debt.
Bonds are usually a good investment for those that want to invest in a financial product, but are looking to lower the risk associated with stocks and shares. The bond investor will have to accept a lower return on their money, as compared with stocks.
Day trading
Day trading is a risky investing method that requires a big time investment.
Day trading, or short term investing, is a type of investment that, unlike long-term stock investing, doesn’t focus on the return over time. Instead, the idea is to buy stocks and then sell them quickly for a profit, making this process a face-paced and high-risk environment.
In fact, day trading is often associated with huge returns and making a fortune overnight much like a lottery. However, just like the lottery, it’s actually a lot more challenging to make money at day trading than it first appears.
In addition, regulatory issues limit what you can do as a day trader.
While it may seem like a great way to make fast money, even the professionals can struggle to earn enough to live on over the long term. This approach is not the best choice for someone that hasn’t got a lot of time, effort, and capital to invest.
Property
Investing in property is different from stock and bond investing, because you actually get real-life assets, something that can provide a greater sense of security for many investors. After all, even if the value of your property goes down, you can still live in it!
Of course, it’s not just homes that property investment covers, but commercial and office buildings, and undeveloped land as well. In fact, what type of property you will buy often depend on how, and over what period of time you’re looking to profit from your investment.
You can drive profit by purchasing a home for renovation and selling it for a gain, or buying a property to lease and generate rental income.
Finding Properties
No matter what type of investment you choose, you will need to do your homework to find the most suitable property. Research a particular area, get the appropriate surveys done, and find a great real estate agent that understands your needs.
Most properties aren’t sold independently, and you need access to experts.
Property investment may be appropriate for people who lack trust in the financial market, because it provides the real-life security of an asset, while still offering lots of options for making money.
Cryptocurrency
The new kid on the block of investment is cryptocurrency. This is a type of virtual currency like the Euro or US dollar, but it’s not controlled centrally by a bank. This means that the issuing of such currency isn’t tied to the financial needs of any particular government.
Instead of being issued by a bank, blockchain technology is used to processes cryptocurrency transactions. This means that each transaction is split into tiny pieces and is processed independently on computers around the world.
There are two ways that crypto can be used for investment. The first is by actually mining the coin, using the blockchain process, as described above. This is something that individuals can do, as well as larger organizations.
Investors can also form a group that is involved in the mining process, something that provides an opportunity for investors to work together as a cohort and invest in potentially more lucrative operations.
The second way that you can invest in cryptocurrency is to treat it as you would any other currency that is allocated on the Forex market, by buying low and selling at a higher price.
Of course, crypto is different to the other currencies on Forex, not only because it has a separate market, but also because of the large amount of new currency that is continually being floated on the market.
This situation makes this investment particularly risky.
Cryptocurrency investment is often best suited to people that have a good understanding of the tech involved, or an interest in how currencies are traded on the financial market.
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
Co-Founder: accountinged.com
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
(you tube channel) kenboydstl
The post The Essential Lowdown On Choosing Investments appeared first on Accounting Accidentally.
January 17, 2019
Little-Known Ways to Make Money Online
There are many products and service that you can sell through an online business.
A growing percentage of customer purchases are completed online, and the public has become comfortable with the process. Here are several unusual ways to make money online:
Panning for Gold Online
We’ve all seen the image of a prospector panning for gold, and gold has remained popular in our culture.
Some businesses have capitalized on this interest with online businesses.
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When selling cash for gold, it’s obviously important to find the best prices for your gold. After all, the whole point of this is to make as much money as possible.
There are lots of things you should consider and factors you should look at when it comes to finding top gold prices, including the use of an online scrap gold calculator.
A scrap gold calculator is a highly beneficial option to utilize when seeking the best prices for your gold, because you’re provided with live prices. This is one of the best ways to get an instant valuation, and it makes the process of selling your gold a lot more easy and convenient.
All you need to do is turn on your laptop, head to an online gold broker that offers a gold calculator and see what you can earn for yours. It really is as simple as that!
Day Trading
Day trading is a very cyclical business, and entrepreneurs tend to enter the business during bull markets, and not see good results during market declines.
For some people, however, trading has become an effective method for accumulating profit online. However, this is not something you should jump into without experience. You need to take the time to read up on trading and day trading indicators, so you understand exactly what’s entailed and you feel confident.
You also need to put together a trading plan, and follow it. Letting emotions get in the way and straying away from your initial plan is one of the worst things you can do, and day trading involves risk.
Matched Betting
For someone new to betting in general, and match betting in particular, using the assistance of a specialist website is most certainly advised. This form of betting can be somewhat complex, and if you do not fully understand it, you could end up losing money.
There are a couple of points that you need to note regarding matched betting. The first is that this is not a solution designed to get you out of financial trouble or to make you rich, for that matter. Nevertheless, it may be a way to generate extra income.
Don’t quit your job or do anything drastic. With gambling, the bookmakers will always win.
Do Your Homework
Starting any new business venture involves risk, and some online approaches expose you to more risk than others. To enter the new venture with your eyes wide open, find people who are using the approach, and ask them about the benefits and potential risks.
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
Co-Founder: accountinged.com
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
(you tube channel) kenboydstl
The post Little-Known Ways to Make Money Online appeared first on Accounting Accidentally.
Smart First Steps to Build Wealth
“Hard choices, easy life. Easy choices, hard life.”
(Jerzey Gregorek)
With planning and self-discipline, you can build wealth.
Building wealth is critically important, in order to live comfortably at every stage in your life.
It’ll more than likely be a slow start, because you have to put the work in, then have patience to see results. However, it’s more than worth it once you start to see the fruits of your labor! Here, we’ll talk about building wealth from the ground up.
Leverage
Before you even attempt to build wealth, learn how to manage your money. If you can’t manage your money effectively, it won’t matter what you do, because you’ll be wasting money on things that don’t matter.
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Hear this: people can end up broke- no matter how much they earn- if they don’t know how to manage their money. This is how celebrities end up blowing all of their cash and going bankrupt, and how lottery winners have no money left after a year.
You should know how much money you have coming in and how much is going out, as well as reasonable budget. Get yourself into a healthy money mindset and you’ll thank yourself later.
Great Examples
You’ll probably find it helpful if you look at some of the wealthiest people out there and figure out how they got to where they are.
They no doubt had their money mindset in place – then what did they do? Warren Buffett, for instance, is so rich because he avoided get rich quick schemes and instead played the long game by saving and investing. Make it your goal to learn as much about these people as possible, even what rulers of the UAE are worth and how they make their money.
Understand how successful people build wealth, and use that knowledge to become like them.
Filling the Bucket
You fill the wealth bucket by making smart investing decisions, but first you need a savings account.
You should be looking into investing, once you’ve paid off any debts and saved up an emergency fund. With an emergency fund, you’ll never have to use credit, and you have the peace of mind that a sum of money can provide.
3 months living expenses is the minimum you should have saved up. Learn as much as you can about investing and take things slow. Remember, the sooner you start, the sooner you can start taking advantage of compounding. Simply working 9-5 and saving your cash will not help you to build wealth. Saved money will depreciate over time.
Action Steps To Consider
Create a budget, even if that budget is simply on notebook paper
Separate your expenses between fixed and variable, and take a hard look at your variable spending
Take steps to cut your variable expenses each month and put the amount you save into a separate savings account
Use a budgeting app to monitor your spending
Save 5% of your gross monthly income
Get Help
Very few people actually do this kind of thing alone. Speaking to a financial planner or some kind of mentor can help you to get out of your own head and see what needs to be done to reach your goals. A financial planner will be able to explain investing to you and answer any other questions you may have.
Start as early on as you can and you’ll benefit. If you don’t start now, you’ll wish you had in a year!
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
Co-Founder: accountinged.com
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
(you tube channel) kenboydstl
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January 16, 2019
How to Improve Skills, Make More Money, and Save
Saving money is critically important- but not everyone does it.
You can think of savings as stored up income – the fruits of your labor that you don’t spend today, but use for some purpose in the future. People save to be prepared for an emergency, such as a car repair. You may save for a down payment on a house, to plan for retirement, or to fund a new business.
It’s a classic case of forgoing immediate gratification, so that you can enjoy something better down the road.
What’s Happening Now
The state of consumer savings isn’t great.
While some Americans are doing well, the vast majority of people are struggling to save at all, and some are in debt. According to CNBC, the average American household has about $178,000 in savings.
But that’s the average.
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If you look at median household savings, a very different picture emerges. According to the data, the median household has only around $11,800 in savings – about enough money to see people through about two or three months of expenses (on a tight budget).
At the other end of the spectrum, the rich are doing very well indeed. People in the top ten percent of incomes have an average of $960,000 in savings. And those in the top one percent have more than $2.5 million – a colossal figure.
Granted, a lot of that wealth is transitory, and depends on fluctuations of the stock market, but there’s no denying that the picture is stark: there’s a big difference between the wealth of the wealthiest Americans, and those in the bottom 60 percent.
Cash loans have become a feature of the modern financial landscape for many households. People need these services to supplement their incomes, but the question is why? What’s driving such impressive levels of wealth inequalities across different groups?
The Economy: Key Factors
One of the problems, and the reason some people can’t get ahead, is the service economy.
Unlike manufacturing jobs in the past, which paid competitive wages, service-sector wages tend to lag, because of the paper-thin margins in the industry. It was hard for an entrepreneur to set up a new factory: they needed a lot of capital, and so when they eventually did, they tended to make good profits.
Today, an entrepreneur who sets up a restaurant business may struggle, because competition is fierce.
The Impact of Automation
Then there’s the problem of automation.
In the past, workers wages went up the higher the level of automation. Machines augmented human labor, allowing each person to get more done with their time. The spinning loom, for instance, helped weavers create more items per hour, boosting their wages as they became more productive.
We now have machines that don’t require any direct human input at all. One company, for instance, has developed a tool which manufacturers t-shirts without the need for human hands.
Removing people from the picture entirely usually means that people have to go into new occupations. Although there are new jobs available, they often require a new skill set. It’s why there’s a surplus of data scientist and machine learning positions available, but nobody to fill them. People just can’t keep up with the learning demands of the modern economy.
Your Solution
These factors create a two-part solution to improve your finances. First, make sure that you continually develop skills to find work that pays a reasonable wage. Again, you must grow your skills over time, to maintain your value as an employee.
Second, you need a plan to save money on a consistent basis.
Action Steps To Consider
Create a budget, even if that budget is simply on notebook paper.
Separate your expenses between fixed and variable, and take a hard look at your variable spending.
Take steps to cut your variable expenses each month and put the amount you save into a separate savings account.
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
Co-Founder: accountinged.com
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
(you tube channel) kenboydstl
The post How to Improve Skills, Make More Money, and Save appeared first on Accounting Accidentally.
January 15, 2019
Successful Companies That Most People Haven’t Heard Of
Some people operate very successfully- under the radar.
In this hyper-exposed media culture, you’d think that every successful company’s name would be splashed all over the Internet. The fact is, there are hundreds of highly profitable businesses that you’ve never heard of.
And that’s a good thing, for two reasons:
#1- There is a lot more business success happening than first meets the eye
#2- As you’ll see below, companies in dozens of industries are making big profits. If you solve a customer problem and manage the business well, you can thrive.
Consider these companies and how they generate large profits.
Tencent
Tencent Holdings Limited is a Chinese multinational investment holding conglomerate founded in 1998, whose subsidiaries specialize in various Internet-related services and products, entertainment, artificial intelligence and technology both in China and globally.
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The company, who Feifei Wang discussed, is based in Shenzhen, China, and is the world’s sixth-largest Internet company by revenue (237.8 billion CNY (2017).
Taobao
Luke Hansford, another Quora writer, discussed Taobao.
“Taobao is more of an amalgam of Ebay, Etsy and Amazon. Individual sellers sell items, but unlike Ebay, the majority are unused products sourced from factories (a smaller portion of items are crafted by the sellers). Items purchased by customers are delivered by any one of the numerous delivery companies throughout China.”
The Lesson: Tencent and Taobao are capitalizing on one of the largest- and fastest growing- economies in the world: China.
Dyson
It’s difficult to pin down the largest company owned entirely by one person, but Sir James Dyson may be at the top of the list. Joe Andon discussed Dyson in his Quora answer.
I just used my Dyson vacuum this morning, and you may have seen their commercials for their unique (and effective) vacuum design.
As the firm’s website explains, James Dyson was frustrated with his vacuum’s diminished performance, due to the bag clogging. After 5 years and over 5,000 prototype designs, he created the first bag less vacuum. I’ll always buy a Dyson- they work great.
Dyson continued to innovate and create products, and the New York Times lists his net worth at over $6 billion. As Dyson says: “we are reinventing ourselves all the time.” That’s necessary to succeed in business. If you’ve had a business setback, this article may help.
The Lesson: Innovation can have a huge financial payoff.
Cargill
Cargill earned over $2.8 billion on sales of $109 billion in its most recent fiscal year. This diversified firm operates in the food, agriculture, and animal nutrition and metals industries, just to name a few. Alex Lieberman mentioned Cargill in his answer.
The firm is owned by the Cargill-MacMillan family, and 14 family members own 88% of Cargill. As of June of ’16, the combined net worth of the families is over $49 billion.
W.W. Cargill started a smack grain storage business in 1865, and then earned wealth in railroads during America’s westward expansion.
The Lesson: A well-diversified business can generate steady growth over time.
Other large, privately held companies: Names you know
Mars: The company known for candy brands, like 3 Musketeers, also owns pet care brands.
Three large accounting firms: Deloitte, Ernst & Young, and PricewaterhouseCoopers all generate annual revenue of over $29 billion.
Car rental: Enterprise Holdings owns Enterprise Rental and other car rental brands.
The Lesson: All of these companies sell simple, “low tech” products and services that people need. Sure, they all use tech, but their success did not come out of the tech boom.
Success in Luxury Goods
It may surprise you, but some of the most viewed Vloggers on You Tube talk about make up and fashion. Millions of views and subscribers.
Why?
Because fashion, beauty and luxury goods are important to lots of people. So important, in fact, that people are willing to pay a huge premium for luxury products.
Peter Baskerville has a great comment about cosmetics in his Quora answer:
“That’s why they are at the ground floor near the entrance of most department stores. Cosmetic marketing creates huge value in the customer’s mind with a strong emphasis on hope and backed up by exquisite packaging, pseudo-scientific ‘miracle’ ingredient and persuasive counter selling techniques.”
So true.
Luxury goods, such as cosmetics, jewelry, clothing and perfume, can make a huge profit margin, if they market to an audience that is willing to pay a big premium for the product.
Experts Can Be Highly Profitable
Forbes points out that, as of 2017, the average private U.S. company has a net profit margin of 8.9 percent. Sageworks performs an annual study of the most profitable industries, and some are listed below:
Accounting, tax preparation, payroll companies: 18.4% average net profit
Real estate leasing, legal firms: 18%
Dentists, lawyers and doctors
So, what do they have in common? These are professionals that we rely on, and we’re willing to pay a premium to get competent advice. How much does it cost to prepare a tax return, represent me in a legal case or perform surgery? I don’t know for sure- but I’m not going to push back much on the price.
An expert, who knows how to solve problems, can be highly profitable.
Unusual products that were hugely successful
1-800-GOT-JUNK
This company is a trash removal service, particularly for large items, such as furniture and appliances. Dozens of franchises and millions in revenue. Why? There was no large company offering this service.
Drybar
Drybar, a women’s salon that specializes in low-cost blowout hairstyling, had estimated annual sales of $60 million in 2014.
Snuggie
The Snuggie, the blanket with sleeves, had sold over 30 million blankets.
Pet Rocks
The Pet Rock, selling for $3.95, was one of the most popular Christmas gifts in 1975.
Businesses can make money in all kinds of interesting ways.
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
Co-Founder: accountinged.com
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
(you tube channel) kenboydstl
The post Successful Companies That Most People Haven’t Heard Of appeared first on Accounting Accidentally.
January 11, 2019
4 Ways To Keep Your Finance Resolutions
The New Year is a perfect time to take control of your business finances.
Entrepreneurs start with the best intentions, but things can soon get out of control. That’s why more than 50% of startups fail within the first year, and eight out of ten close at some stage in their lifecycle.
To succeed financially, you must manage your money well, monitor you expenses, and managing clients. Without a sufficient cash inflow, you can’t operate your business.
Here are four straightforward and hassle-free ways to keep your money resolutions this year:
What About Taxes?
While the deadline for filing is in April, the payment deadline for 4th quarter estimated tax payments is in January of the following year.
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So, the New Year may begins with a massive check to the IRS when money is tight. Of course, this can lead to complications, especially if you don’t have the cash. However, it’s not hard to pay, if you consider the tax implications ahead of schedule.
Put the amount aside in a separate account and leave it alone. With a bank transfer, there’s no need to think about it until the estimated payment is due.
Meeting the deadlines means you don’t begin the year on your back foot in a heap of debt.
Staying on Top of Expenses
Consider each of your cash inflows and outflows.
The only way to commit to your promise is to get organized. As far as your finances go, this means keeping tabs and everything that comes in and out. Then, you can create a budget for the short to medium-term, and develop a healthy routine.
To do this, it’s important to ask for receipts, to keep them in order, and to log them appropriately. Otherwise, it’s impossible to tell what’s what when you’re left with a pile of paper.
Wiping The Slate Clean
Sometimes, paying your taxes on time and organizing your finances isn’t enough to stay ahead.
When businesses are in a huge amount of debt, they need to pay down loans before tackling a new year’s worth of finances. It’s not nice to think about, but this is where applying for bankruptcy comes into play. If it’s your only option, a successful application will wipe away any unsecured debts.
Find more info by following the link. There are different types – chapter 7 and 13 – and you must understand which one suits your needs before filing.
Finding A Third Party
If the above sounds like hard work, it’s because it is tough. Your feelings of despair aren’t uncommon – organizing finances is a boring, drawn-out process. And, without any experience or skill in the area, you might do more damage than good.
Accountants are an excellent investment as they fill in the gaps. With their knowledge, you can cut your expenses and get money back through tax schemes and loopholes. All you need to do is to manage your receipts on a yearly basis.
Attitude
Last but not least, don’t forget to maintain a positive mental attitude. Hurdles will appear out of nowhere, yet you can jump them as long as you think clearly.
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
Co-Founder: accountinged.com
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
(you tube channel) kenboydstl
The post 4 Ways To Keep Your Finance Resolutions appeared first on Accounting Accidentally.
5 Smart Decisions for New Investors
New investors can find money management a daunting task.
Selecting a savings account can be fairly straightforward, but choosing what to invest in is a completely different ball game. It’s scary, as many people know that there’s an element of risk involved, and that there are so many companies and a plethora of funds to choose from.
Of course there are risks with anything, but investing consistently is a great way to build wealth in the long term, without swapping too much of your time – so it’s more than worth it, if you’re determined to get the hang of it.
Breaking investing down into steps can make it far easier and less daunting for you to work towards. Take a look and find 5 helpful steps below:
#1- Figure Out Your Goals
The first thing you really need to do is figure out your goals.
This will help you to assess the time over which your investments can be left to grow. For example, someone saving for a home may simply use a checking account, while an investor setting money aside for retirement would use a 401(k) retirement account.
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Sit down and figure out what you’re hoping to achieve, so you know exactly which route to take later on.
2. Know Where To Start
To start investing in the stock market, you’ll need an account through a mutual fund company, or a retirement plan at work.
Online investment services like Moneybox and Nutmeg are great for getting started and ease of use. However, a mutual fund shop is usually the best option, if you want to put money into a variety of funds easily.
3. Decide What To Invest In
You need to know what you’re looking to invest in, if you’re going to be a successful investor.
Most people start out with stocks or funds, where you invest directly in companies by buying their shares. You can invest indirectly in a number of businesses via a fund.
Investing in a wide range of companies ensures proper diversification, so that your portfolio is safer, but you’ll need to do plenty of research. That isn’t all, though; real estate is another option, and some people choose to invest in bitcoin, or another form of cryptocurrency.
4. Be Aware Of Common Mistakes
Messing with your portfolio too often is a huge mistake – this is a long term project. You need to pick a strategy and stick to it, even if you encounter issues along the way. Just set it and forget it and you’ll have a much better time.
5. Know How Much You Can Afford To Invest
You need to know how much you can afford to invest initially, and then monthly/annually. This way, you can explore which investments are right for you. Bear in mind that emergency funds will need to be accessed quickly, and your emergency fund should not be invested in stock and bonds.
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
Co-Founder: accountinged.com
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
(you tube channel) kenboydstl
The post 5 Smart Decisions for New Investors appeared first on Accounting Accidentally.
January 9, 2019
Online Bookkeeping Tips & Accounting Best Practices
Operating your business requires you to make dozens of decisions each week, and managing growth creates even more challenges.
To streamline your business operations and prepare for growth, you need get the most out your online bookkeeping software. Use these online bookkeeping tips to take charge of your accounting processes.
Bookkeeping Explained
Bookkeeping is the process of using source documents to post accounting transactions, and your accounting results are used to generate the financial statements.
Assume, for example, that you receive a bill from a vendor, and you want to pay the bill. The bill is your source document, and that document is used to post an increase in expenses and a decrease to cash in your accounting records.
When you automate your bookkeeping process, you’ll quickly see a number of benefits:
Start With the End in Mind
It may seem odd, but you should consider how your accounting records might be used years down the road.
At some point, you may want to raise capital by selling ownership (stock) to investors, or you may need to borrow money to fund operations. Looking even farther down the road, you may decide to sell your company.
Investors, lenders, or a potential buyer all want to see a well-organized set of accounting records. Bookkeeping software helps you minimize errors, work quickly, and generate an accurate set of financial statements each year.
Start using software sooner than later, so you can maintain a set of financial statements for each year of company operations.
Get Rid of Paper
Bookkeeping software allows you to back up on the cloud, and to minimize the use of paper files.
Consider, for example, the hundreds of bills you receive each year. Rather than keep paper files, you can scan and save each bill, and the bill can be electronically filed with the accounting entries posted to pay the bill.
Assume, for example, that you want to review a $200 payment to Standard Office Supply posted on November 15th. Your bookkeeping software can display the image of the bill, along with the expense account and the check number used for the transaction. This level of documentation makes it much easier to review accounting transactions.
Where’s Your Chart Of Accounts?
Your chart of accounts is a listing of each account name and number you use to operate your business, and you should add and delete accounts as needed. Bookkeeping software makes it simple to make changes to your chart of accounts.
Say, for example, that you’re expanding a restaurant that you operate. You’re adding more space in the kitchen, and purchasing more ovens, refrigerators, and other equipment. Each of these new assets should be posted in your accounting system as a fixed asset, so that you can post depreciation expense.
With bookkeeping software, you can quickly create a new account name and number, and the new account will be an option that you can choose when you post accounting activity. If you need to post $500 in depreciation expense for the new Sub-Zero refrigerator, your accounting system can access the account name and number automatically.
Maintaining a useful chart of accounts make your accounting records and financial statements more accurate.
Keep Vendors Happy
Paying your vendors on time is important, so that you can order quality products and services from a reliable supplier. When you receive a bill, you can set up payment reminders in your bookkeeping software, so that you can pay on time, and possibly take advantage of discounts.
Assume that your restaurant orders meat from Hillside Meat and Fish. Hillside offers a 5% discount on invoices paid within 10 days, and you make a note in your software system. If you have sufficient cash available, you can respond to a software alert and pay the invoice to take advantage of the discount.
Bookkeeping software helps you manage your bills and available cash flow.
Avoid Payroll Problems
Processing payroll may be the most time-consuming task for a business, and using software can make a huge difference. Payroll requires these four steps:
Data collection: Workers fill out a W-4 form, so that the employer can calculate the correct amount of tax withholdings from gross wages.
Pay calculation: The company computes tax withholdings, and subtracts withholdings from gross pay to determine net pay.
Payments: Workers are paid by check, or by direct deposit.
Reporting: The firm reports tax withholdings to the federal and state taxing authorities, and forwards the payments withheld.
As an employer, you may also have to calculate withholdings for company benefits, such as insurance coverage.
Bookkeeping software allows you to collect data and store it online. The software calculates net pay, and you can link your accounting system to your company bank account. Workers can be paid electronically, and your software can generate the withholding forms.
Do You Know Total Costs?
You can’t price your products and services correctly, unless you know the total costs you incur.
If, for example, you want to generate a $10 profit per baseball glove manufactured and sold, you need to know the total costs incurred to manufacture, package, and ship each glove. If total costs are $60, you need to price each glove at $70.
Bookkeeping software helps you track and document each cost you incur in your business, and you’re less likely to miss an expense. Using software allows you to price your product correctly to generate a targeted level of profit.
The Payoff
Purchasing and installing bookkeeping software requires time and effort, but the payoff more than justifies the cost. Use software to operate more efficiently, and grow your business profitably.
Kenneth W. Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
Co-Founder: accountinged.com
(email) ken@stltest.net
(you tube channel) kenboydstl
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The post Online Bookkeeping Tips & Accounting Best Practices appeared first on Accounting Accidentally.
January 8, 2019
Financial Mistakes You Can Work To Avoid
We all have fears.
Can you imagine thinking back 20 years and regretting some mistakes you made? It’s a horrible feeling, but countless people feel that despair every single day because of the poor financial mistakes they made. They can easily spiral out of control, causing them to live in a financial nightmare that they can’t dig themselves out of.
But you can change.
It’s not something that we would wish on anyone, so here are some poor financial habits that you need to stop as soon as possible before it haunts you forever.
Budgets
Budgeting is a simple way to ensure that you don’t overspend your money each month.
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A little extra meal or a bit of entertainment probably won’t hurt, but when you do it too often it will start to get to your head and cause you to lose sight of how much money you’re actually earning and spending.
Always budget and never lose track of your money.
What’s the Goal?
A big mistake that people often make is saving for the sake of saving.
If you’re saving money you need to identify a specific purpose, even if that purpose is simply to have emergency money for the future. For example, your financial goal could be to have $2,000 saved for car emergencies. Another goal could be to save enough so that your children can go to college, or being able to sustain yourself with two sources of income.
The important step is to identify a goal- and write it down.
Literacy Is Key
There are many people who simply don’t understand financial terms, or fail to study them, in order to understand what kind of financial situation they’re in. You can only feign ignorance for so long, and you must take responsibility for your finances.
There will be no “oops I didn’t realize I had to pay tax” and no “I didn’t realize I needed should’ve saved this money” and so on. Financial literacy is an important skill to have, so take action to educate yourself.
Investing Choices
Always have a plan for your money, especially if you’re investing.
There are people that end up having to sell structured settlement because they misjudged how much money it would return, or need an emergency sum of money because they neglected to save in the past.
Investments are important for building wealth and happiness, but there is always the possibility that you misplace your trust in your investments and end up losing a lot of your wealth due to poor decision-making.
Get the Discipline
Forgetting to budget, impulse buys and trying to stay trendy are very poor financial decisions to make. In fact, under half of all Americans actually spend less than they earn, meaning that many people overuse their credit cards, end up in debt and ultimately struggle to pull themselves out of a financial nightmare.
Get the discipline and avoid financial troubles.
Action Steps To Consider
Create a budget, even if that budget is simply on notebook paper.
Separate your expenses between fixed and variable, and take a hard look at your variable spending.
Take steps to cut your variable expenses each month and put the amount you save into a separate savings account.
This post is for educational purposes only.
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
Co-Founder: accountinged.com
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
(you tube channel) kenboydstl
The post Financial Mistakes You Can Work To Avoid appeared first on Accounting Accidentally.
Smart Decision for Rental Properties
Owning and maintaining a property can be expensive, and the cost can become a burden if you don’t live in the property. To cover the cost of your property and generate extra income, consider renting the location.
Finding a renter it is a great way to ride out the storm for those who want to sell their property eventually, but prefer to wait for a higher price offer.
This article aims to provide tips for those who are considering the prospect of renting out a property. We’ll discuss the key factors you should consider before renting, and the process of finding a reliable renter.
What’s Your Market?
The first thing that you will need to do is get your hands on market research, in order to determine a fair valuation for the monthly rental charges.
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You should seek to find information regarding what other rental properties in the area are charging. Set a competitive rental rate, so that potential renters consider your property as an option.
Your Look
The decoration and overall look of your property are important.
First, decide whether you are going to rent a property fully furnished or not. It goes without saying that you will be able to get a slightly higher payment for a property that is furnished.
You need to be careful when selecting this option. It is important to remember that while you may love bright pink walls and fancy decorations, others may not. This will simply limit the number of people that are interested in your property.
By all means, add some personality to the place, but make sure that you do so in a way that is generic and attractive to all.
Ask An Expert
You should also consider the prospect of seeking aid from a professional company. There are lots of investment businesses and rental experts you can contact, like Drew Fasy.
Renting a property may cause unexpected issues that you must address. Instead of panicking and worrying about what you need to do, find a industry professional who can advise you.
Managing Extra Income
Once you find a renter and you’re able generate extra income after paying for the cost of your property, use these tips to start saving money and investing:
Discipline and time
With discipline and time, I think most people can accumulate far more wealth than they think is possible. But growing wealth requires change- which is precisely why most people don’t make the effort. The changes I’m suggesting involve an old friend:
Delayed gratification
Some decisions are relatively small:
Dropping a subscription music service and just listening to the free version (Pandora, for example).
Making coffee at home two days a week, which means that you stop by Starbucksless often.
Buying afew more generic products when you go to the grocery store and Target. (I’m not going generic on salad dressing, however).
Since these are smaller decisions, the amount of gratification you’re delaying is small. You don’t mind listening the commercials on Pandora (I certainly don’t- I just turned down the sound), and the coffee at home isn’t bad.
Other decisions are much bigger. StudySoup wrote this great article on the average amount of money a college student saves by having a roommate. The average savings over four years is over $15,000.
Now, having a roommate is a big sacrifice, because you lose a fair amount of privacy. If privacy is really important to you, it’s a true delay of gratification (until you graduate, get a job and can afford to live alone).
So, what do I get?
OK- so what do I get out of all this delayed gratification?
You build wealth- which can give you peace of mind.
Here’s a practical example: By making changes to your spending and building a savings account, you create a $1,000 emergency fund. If your car brakes down, you can pay for the repair.
Action Steps To Consider
Create a budget, even if that budget is simply on notebook paper.
Separate your expenses between fixed and variable, and take a hard look at your variable spending.
Take steps to cut your variable expenses each month and put the amount you save into a separate savings account.
This post is for educational purposes only.
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
Co-Founder: accountinged.com
(email) ken@stltest.net
(website and blog) http://www.accountingaccidentally.com/
(you tube channel) kenboydstl
The post Smart Decision for Rental Properties appeared first on Accounting Accidentally.
