Tag: small business accounting

Top 4 Reasons All Businesses Need Year-Round Accounting Services

Thursday, April 6th, 2023

Successful small businesses don’t happen automatically. They require hard work and a lot of planning. Having excellent accounting for your small business is imperative if you want your business to be the best it can be. From bookkeeping, audits, payments, and tax services to financial statement preparation and advisory and assurance services, an accounting service delves into every part of the business the whole year round to ensure ultimate success.

Top 4 Benefits to Year-Round Accounting for Small Businesses

Although there are a myriad of advantages to having access to small business bookkeeping and accounting services throughout the entire year, four stand out as being the most important. They include:

  1. Provision of a solid record of finances – Finances don’t just happen once a year, or however often you decide you need accounting for a small business or a bookkeeper to do your small business tax, or whatever services are needed at the time; records and analysis are a year-round requirement if you want to make sure your business is healthy and moving ahead at all times. By systematically keeping track of every single transaction involved in your small business, during the whole year, you can maximize performance, help eliminate the chance of errors, and evaluate such areas as cash flow, employee performance, and so forth.
  2. Provision of business opportunities and insightful financial analysis- Whether you are seeking growth or just wanting to stay afloat, thorough analysis and realization of business opportunities are a must. It takes a healthy accounting program to do either of these feats because in-depth accounting is key to managing costs, seizing opportunities, catching directional mistakes, and improving your business cash flow. If you only employ accounting services for your small business tax at your annual tax time, you are likely losing out on information you could have gained throughout the year.
  3. Provision of optimal tax advice and services – Small business tax isn’t a once-per-year activity. You need to have information at your fingertips that will help you save money on taxes over the course of the entire year. You also need tax planning so you can maximize deductions throughout the year. By having a year-round tax service, you can be well-prepared when tax time comes.
  4. Provision of a good game plan – Business takes place all year. If you only hire an accounting firm for small businesses on occasion, you’ll miss out on the advantages having well-kept books and analogies provide the rest of the year. By the time your Enrolled Agent comes, your finances will have already changed from what they were when you could have corrected a mistake or grabbed an opportunity. Your business plan is ever-evolving and if you don’t have a professional overseeing the finances of it throughout the year, your business will not be functioning as optimally as it should be.

A Firm Decision: Hiring a Firm vs. Hiring Multiple Accountants

When your right-hand doesn’t know what your left hand is doing, it spells disaster for a small business. Even though your business likely needs multiple services, like small business taxes and day-to-day bookkeeping, if you go hiring different people from different places to tend to those duties, you may end up in trouble. Why spread it out when you can trust one firm to tend to your small business accounting, bookkeeping, taxes, and Enrolled Agent needs all in one place? Some reasons that a one-stop-accounting-shop is wise include:

  1. Consistency. You are more likely to achieve a high level of accuracy and efficiency when you have one and only one accounting firm tending to all your bookkeeping and accounting needs across the board. There’s no wondering what the “other guy” is doing when you have an experienced, expert-level agency working for you.
  2. Cost-effectiveness. When you go with one outsourced agency for all your accounting needs, you’ll get services like financial statement preparation, tax preparation, bookkeeping, analyzation of your books, and so much more for one fee.
  3. Minimizing fraud or financial misconduct threats. Having only one accounting firm to deal with lessens your risk of being cheated, fraud, or being the victim of any other type of misconduct or criminal activity. Especially when the small business accounting firm is a well-established, reputable company, you can rely on them to meet your needs without security threats.
  4. Lower risk of penalties. It’s not enough to not be aware of a law or regulation. You are still held accountable. In small business bookkeeping and accounting, there are a multitude of penalties you may encounter. By having service from one firm year-round, you lower your chances of being fined or penalized.
The Bottom Line: How It All Adds Up

The bottom line is that although you may think you are saving money by going with a small business accounting, bookkeeping or tax service only when you need them throughout the year and by hiring multiple outsources rather than one outsourced firm, the fact is that you may be costing your company dearly. It’s time to rethink your game plan, so you can come out winning.

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How to Build a Strategic Plan and Engage Employees for Business Success

Friday, July 1st, 2022

Building success requires both a plan and engaged participants — like your employees and staff. Crafting a success plan begins with a few fundamentals in business that foster success and encourage unity among those under your leadership.

Make Prudent Investments

Consider your time and energy to be your most valuable commodity; don’t invest your time just anyplace. Look for important and meaningful outlets toward your business goals that are worth your efforts. Prioritization is key in making prudent investments of your own time at work.

Become a Delegator

Learn to delegate effectively and, as a leader, hand-off tasks that are high effort and low benefit to the team’s goals, overall. While you may not be able to skip these tasks altogether, don’t waste your time on them. Give these projects to team members that are industrious and looking for additional challenges during the workday. Delegating also sends the message to the team that you trust them and need them, which can improve morale and overall success, subsequently.

Start the Day with a Plan

Make a tactile plan each-and-every day. Start the day by reviewing the list, that you have started the day before. Break larger jobs down into manageable tasks and give yourself some of these chores daily to work toward getting the larger project accomplished. Be realistic though about time restrictions and your busy schedule.

Foster Focus

If you want to make progress toward your priorities and goals, eliminate the din and distractions that can waste valuable time throughout the day. Give yourself uninterrupted time to work on these projects and review the team’s progress toward goals by setting a timer and avoiding calls and online detours during the exercise. This can be tough but setting 30-minute time periods can result in a lot of progress toward outlined goals by the end of the week, month, and year. Without the added energy of multi-tasking, you will fly through tasks and activities.

Take Your Time

Always take the time to review and evaluate the progress that you and your team are making toward goals. Never be too busy to reflect and revisit instances that may be vital to meeting certain milestones or markers. Provide positive affirmation and honest feedback to your team so that individuals may find ways to improve performance, while also making their own job easier in many instances.

Give Yourself Room to Improve

Nobody is perfect and even the best-laid plans can sometimes falter. A good leader understands that there is always room to improve and it pays to continually come up with fresh strategies for success, whether this is new marketing campaigns, inventive incentive programs, or innovative tactics to find talent for the company. Give yourself measurable goals including priorities and accomplishments on a daily calendar or planner.

When it comes to small business accounting, rely on the industry experts at BMH Accounting, with multiple locations in South Florida. The team of qualified accounting professionals at BMH provide monthly accounting, bookkeeping, tax planning, and payroll services for businesses, brands, and entrepreneurs in the area. For more inquiries or assistance with your business plan. Feel free to contact us or call today.

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Know Your Tax Obligations to Ensure Your Business Remains in Good Standing

Wednesday, June 1st, 2022

Every business, no matter how small, has several tax obligations that it must meet. This includes taxes at the federal, state, and sometimes local level along with payroll taxes. At BMH Accounting, we understand that keeping track of so many obligations can be challenging. However, doing so is essential to avoid fines and possibly other sanctions from the Internal Revenue Service (IRS) and your state or local governments.

In terms of withholding from employee paychecks, you must deduct federal tax, state tax if applicable, social security, and Medicare. Below we outline how to determine your tax obligation at both the federal and state levels. Before you arrange to pay any taxes, however, you must first choose your tax year.

How to Choose the Tax Year Most Appropriate for Your Business

Choosing a tax year to coincide with the 12-month calendar year is the most common among business owners. This typically works well for companies without special accounting situations that would require the business owner to choose another alternative. If your accounting cycle doesn’t end on December 31, using a fiscal year instead of a calendar year will work better for you. If you have a special situation such as operating your business only part of the year due to starting or stopping it, you should select a short tax year for your filing status.

Federal Taxes

The type of structure you choose for your business determines the categories of taxes you pay and how much you pay for them. You may be subject to one or more of the following types of federal taxes:

  • Employer tax: This covers specific payments you must make such as contributing to the workers’ compensation and federal unemployment programs.
  • Estimated tax: As a self-employed business owner, you must make estimated quarterly tax payments to the IRS.
  • Excise tax: The IRS only charges this on specific services or goods such as alcohol and tobacco.
  • Income tax: This is the amount of federal tax withheld from employee paychecks based on their income and number of exemptions.
  • Self-employment tax: People who employ themselves are subject to the full amount of social security and Medicare, currently 12.4 and 2.9 percent.

State Taxes

Each state creates and enforces its own rules regarding employment taxes. If your state collects these taxes, the types and amounts you pay will depend on your business structure and physical location. If you’re a sole proprietor, for example, you will pay state taxes via estimated payments and include your income and expenses on your personal tax form. Corporations, on the other hand, pay taxes as a separate entity from the people who own the business.

Get Help with Proactive Tax Planning and Meeting Your Tax Obligation

BMH Accounting is available now to assist your small business with a tax planning strategy to reduce your tax burden and gain a better understanding of the tax obligations you face. Please contact us today to request your initial consultation.

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Proactive Tax Planning is Key to Avoiding Tax Liabilities

Tuesday, March 15th, 2022

When it comes to Tax Planning, being proactive pays. Being vigilant and precise with your tax reporting and expenses can minimize your tax liabilities- and save you money at year’s end.  Tax prep and documentation should not be something that only occurs at tax-time; proactive tax planning is something that happens year-round to avoid nasty penalties and maximize deductions.

Some tax planning tips include:

Provide Proof

Prepare to be vigilant about keeping track of business expenses- which can be a bear! A good rule of thumb is that if you plan to deduct an expense, you will need some sort of proof of the purchase, like a receipt, invoice, or canceled check. You can also use bank records, if needed, to document purchases related to business that you do not have an actual receipt for when it comes time to complete or file your taxes and reports.

Document Diligently

Always save invoices or receipts for all your business-related purchases. It helps to write and attach a note explaining the purchase for documenting later, when you may have forgotten the specifics surrounding the expense.

Segregate Accounts

Make sure to keep personal accounts separate from business accounts whenever possible. It can make accurate record-keeping nearly impossible and you could suffer by missing out on certain business deductions this way.

Classify Carefully

Don’t misclassify your workers as the income-tax withholding and employment taxes are quite different. While you do withhold federal income tax and FICA taxes from your employees, you also are responsible for unemployment taxes and your own share of FICA. When you are dealing with staff that are actually independent contractors, you are not required to withhold taxes, making the individual responsible for their own self-employment tax liability. This also eliminates the need to pay separate FICA or unemployment taxes.  Talk to your accounting professional to learn more.

Pay Promptly

Pay the employment taxes that you collect from the wages of your employees and staff for federal income tax and FICA (Social Security and Medicare) taxes promptly. The IRS is not tolerant of delayed payment and noncompliance penalties can be severe.

Industry experts offer tax tips for small businesses, including that you need to be careful and cautious when making tax deductions. This may look suspicious and trigger an audit, further reinforcing the need for organized documentation. The IRS frequently assesses business tax deductions, like vehicle use and travel expenses, to ensure you are sticking to their guidelines and limits.

Consider Hiring Help

Take the worry out of your business taxes with some professional help from BMH Accounting. If you own or operate a company or brand, outsourcing your financials and tax reports to a certified accountant makes good business sense. Don’t risk penalties and fines by going it alone; hire a tax professional today.

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5 Key Mistakes That Could Lead to a Small Business Failure

Tuesday, March 1st, 2022

A small business failure can be surprising in terms of what led to the demise and how it may have been avoided. There are some common errors that many small business owners and entrepreneurs make that lead to problems that cannot be overcome. Subsequently, it is these errors that often lead to the end of the company or business.

Avoid these 5 key mistakes that lead to a small business failure:


Money Issues  

Probably the biggest reason for small business failure is money; aim to keep your overhead as low as possible and track all your expenses. Be frugal, even when you don’t need to be and be on the lookout for ways to monetize and further improve your bottom-line. Always have a goal of streamlining your operations in efforts of curbing costs and improving revenues to succeed.

Too Big, Too Fast  

Another reason small companies don’t succeed is that they try to take on too much, too fast. Start small, such as a pop-up shop or an event like a festival or fair to learn the market. Some businesses assume there is a market for something only to discover that there simply is not; know the market before investing.

No Back-up Plan  

Have you heard the expression, ‘prepare for the worst but hope for the best’? That should be your mantra when it comes to your small business. Always have a back-up plan and anticipate, even expect, things to occasionally go wrong or askew. That is simply part of doing business. Make sure that you are fully covered in areas like insurance, staffing, and that you have a slush fund ready for a rainy day.

Lack of Business or Industry Experience  

Are you sure that you fully understand the market that you are taking part in? Surprisingly, many businesses fail due to a lack of understanding of their market. For example, some restauranteurs may not understand the time, commitment, and money that it takes to open a restaurant in a specific area.  Many successful companies encourage entrepreneurs to go with what they know.

Underestimate the Undertaking  

Speaking of underestimation, make sure that you are well-aware of the effort and time that go into making a business successful. Remember that you will have a wide range of obligations, from marketing and human resources to serving clients and keeping facilities clean.  Make sure that you never minimize the work that it will take to make your endeavor a success.

These common issues are not always a result of the business owner making rash or compulsive decisions, but rather may be related to the industry, current market, or other unforeseeable circumstances that impact revenues and force closure.

For help keeping your business matters precise and timely, reach out to BMH Accounting, Don’t let mismanagement be the reason your business fails to thrive and succeed; get the accounting assistance that you need.

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