How Outsourcing Accounting Can Help Grow Your Small Business

Small business owners are notoriously short on time. They manage everything from sales and marketing to employee scheduling and benefits, not to mention being an expert in whatever good or service it is that their business offers. And there are hurdles every step of the way as you try to grow your business. Hiring an outsourced accounting service can help you tackle many of these including ensuring you don’t pay too much in taxes, that you have time to focus on sales and marketing, and that you are able to prepare thorough financial reports for investors.

Why is an accountant important in a business?

Accountants consider the big picture strategy needed to keep your business strong and growing. They can answer your questions about financial reports, cash flow, depreciation, and more. They can give tax savings advice, such as when to make capital purchases, what you can deduct, and how to reduce taxes on capital gains. They can identify opportunities to improve profit margin and business growth and keep you legal – preventing missed deadlines and noncompliance penalties. 

When you’re looking to grow your business but don’t have the time or resources to do so, hiring an outsourced accountant or outsourced accounting service like Xendoo can free up your time and provide insights and ways into how you can increase your cash flow, strategically prepare for your taxes, and focus on what you do best.

How does outsourcing accounting help your business grow?

It’s not just keeping track of your financials. Outsourcing an account can help your business grow in the following ways:

Accountants help save money

We can tackle the reinvestment more in detail here and use the tax preparation anchor here. 

Accountants help small business owners save money in many ways, including through strategic tax preparation. They help you make smart decisions on your operating expenses, when to make big purchases, and what deductions you can make. Many small business owners spend too much money on taxes – an accountant can help you prevent overspending on taxes and help you strategize on how to cut costs in every area of operation. The money you spend on an accountant is an investment into your business and will help you grow by saving you money in the long run and leaving you with more money to invest back into your business. 

Accountants help save you time

Time can be spent on marketing and other business growth while they look into the books.

Small business owners have enough on their to-do list – when you’re looking to outsource some of the work and focus on growing, outsourcing accounting and bookkeeping services are the best choices. Bookkeepers and accountants will do a better job at a quicker pace than a small business owner who is strapped for time and whose talents might lie elsewhere. You’ll be able to focus on sales, marketing, and all of the other ins and outs of growing your business when you aren’t worrying about accounting.

Outsourced accounting services are scalable

As you grow so can your services without the need to hire FTE. 

Your outsourced accounting team can easily grow as your small business does. You won’t need to hire a full-time employee to handle your accounting when you have a scalable outsourced accounting team on board. You can skip the hassle of hiring and managing a full-time employee as you grow (and save on the need to offer expensive benefits, too!) by hiring outsourced accounting services like Xendoo.

Better business analysis

Gives you accurate insights into your business strengths and weaknesses, which is important if you want to expand. Investors will want to see accurate books. 

As you grow you will continuously need better analytics on your business. An outsourced accounting team can provide accurate insights into your business strengths and weaknesses, helping you strategize on how to grow. And when you’re ready to take on investors or apply for a line of credit the banks and investors will want to see accurate and detailed financial reports. By having an outsourced accountant on your team, you will be able to show investors and banks precise, up-to-date records and prove you take your finances and the growth of your small business seriously.

Help increase cash flow

Keep track of outgoing and incoming money. Can find ways to help you save money long term with paying on time or ahead, and chasing down delinquent invoices. 

A key strategy to growing your business is taking charge of your cash flow. Outsourced accounting services like the team at Xendoo can keep track of your incoming and outgoing money and can help you find ways to save money in the long term – through strategic tax preparation, cutting operational costs, and paying your bills on time or even ahead of time! And they can help you chase down delinquent invoices from clients who are behind on paying you. Your accounts payable and receivable will be closely monitored and managed without you ever needing to worry about it.

Outsourcing accounting can help you grow your business.  By outsourcing your accounting, you can save money on hiring a full-time accountant, plus, it will give you more time to focus on running your business and creating value for your customers and your employees.  Xendoo is all about providing timely and accurate financial information to business owners allowing them to make strategic decisions. If your business is struggling, know that there is a better way and Xendoo can help. 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

Articles on

Accounting

Five Customer Loyalty Tricks for Fitness Franchisees

Editor’s Note: This post was originally published in October 2017 and has been updated for accuracy and comprehensiveness.

As a fitness franchise owner, you know very well the challenges of getting new members through the door, even in the best of times. It’s never been easy, but the fitness industry has been one of the hardest hit by COVID-19, with value brands representing the largest share of losses in the industry. Major gym franchises like Gold’s Gym have filed for bankruptcy protection, and others may soon follow. Polling has shown that as many as 60% of Americans either have canceled or are planning to cancel their gym membership due to financial hardship or concerns about safety. Simultaneously, the growth of digital and at-home fitness products has added to the pressure on gyms, with Peloton doubling its sales in 2020. 

So, in that environment, how do you get new customers through the door and convince your existing customers to remain loyal? We can start by taking a cue from one outlier in the value gym segment that has shown more resiliency than its competitors through the pandemic. The Anytime Fitness franchise has rolled out a comprehensive COVID-19 policy to protect their members’ and staff’s safety and begun offering advance reservations to secure a spot when capacity is limited. When customers have confidence that you are genuinely looking out for their best interests, they are more likely to remain loyal.

But beyond just building trust among your members, there are some other things you can do to encourage customer loyalty in this most challenging of times.

Loyalty Rewards Program

Have you ever noticed that it seems like every store you go into wants you to join their rewards program? Well, there’s a reason for that – it works. Create a rewards program for your loyal customers with some nice little freebies to help keep them engaged. This might take the form of a free t-shirt after ten visits, or maybe a free post-workout smoothie with every 10 purchased. You can get very creative with this, so don’t be afraid to experiment. Never underestimate the power of free swag for customer loyalty. Everyone wants to feel special.

Frequent Customer Discounts

Many gym members, particularly in the value segment, care just as much about the size of their wallets as the size of their jeans, so giving them a discount on a product or service is a great way to boost customer engagement. This might be a discount on a personal training session within the next month, or possibly a coupon for deals on gym apparel. Gym apparel is a particularly desirable thing to encourage because, in addition to the revenue from the sale, you get the added benefit of free advertising for your fitness franchise every time the customer wears it.

Three women stand besides each other at a gym

Photo by bruce mars on Unsplash

Referral Rewards

Let’s face it – we all have that one annoying friend who can’t stop going on about how great his or her fitness studio or workout program is. Well, that’s exactly who you want to be your customer, so you need to create a compelling reason for that person to be your customer. Create a referral rewards program and offer a membership discount for each new customer brought in on a referral. You’ll soon find your membership roster – and your bottom line – growing steadily.

Premium Memberships

Take a cue from companies with the most loyal followings and offer VIP or premium membership packages. Do a little up-selling. The key here is to create a value proposition that’s compelling enough to entice your customers to pay a little more without eating into your bottom line. If a member is already paying $30 per month for a basic membership, he or she would probably be willing to pay $35 or $40 to add free tanning or a free monthly workout with a personal trainer. It can be tricky to find the right balance for your package, but this is a great way to reward your most loyal customers if done right.

A man holding onto rings tries to beat a record for a gym contest

Photo by Luis Vidal on Unsplash

Run Contests

Contests can be a great way to keep your members engaged with the club and create valuable rewards for members who participate. You might run a contest with a free gym t-shirt or duffel bag to the member with the most visits during the month, or possibly a “Biggest Loser” type contest with a free month of membership as the prize. You can also incorporate social media into your content strategy by encouraging people to share, like, and comment on your content. Give members who complete one workout and check in on Facebook during the next month a raffle ticket to a drawing for a free duffel bag or another prize.

Focus on Your Core Business

Business owners are notoriously bad at time management, spending too much time on things that others can do and not enough on what an owner should be doing – growing the business. Offload time-consuming administrative tasks to employees or an outside firm. Consider outsourcing your bookkeeping and accounting, which is one of the biggest time vampires in an owner’s day. By getting those off your plate, you can have time to spend on thinking up creative ways to engage with your members and drive loyalty at a time when you need it most. 

 

So what’s the best way to boost customer loyalty at your gym franchise? Start by taking your own gym’s advice and just do it. Set a goal and commit to seeing it through. Start with these tips, but don’t just stop there. Be creative and come up with other ideas, and then let us show you how Xendoo can help your fitness franchises become more profitable with a free trial. Let’s start building that customer loyalty muscle together!

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Articles on

Small Business Tips

A blue notebook with numbers onthe cover rest on table near a laptop

Time to Play Catch Up: Catch-Up Bookkeeping Services for Small Businesses

Nearly 25% of businesses are behind on their books and nearly 41% of business owners try to do their bookkeeping themselves. It happens easily— you fall a month or two behind, then by the time you look up, an entire quarter has gone by, and your books haven’t been updated. With inaccurate and out-of-date books, you might have late invoices, end up over-extending your small business, and not be able to dial in your operating cash flow. You might even be in danger of being non-compliant with the IRS. Perhaps nothing bad has happened yet, but you know it’s time to catch up on bookkeeping

One of the most essential services a bookkeeper can provide for a business owner is to keep the company’s books accurate and up-to-date. Being able to quickly and easily review the status of your finances is crucial to short and long-term success for any business owner. When you know the health of your finances, you can make quicker decisions concerning everything from who to hire next to what marketing strategy recently worked best.

Reasons to catch up/reconcile

Besides being a smart business practice, catch-up bookkeeping provides additional benefits grow growing companies. Such as:

  • Smart/quick decisions: A bookkeeper will review vendor payments and record expenses to manage your spending, helping you manage your cash flow. A bookkeeper will track your sales, so you know what’s most profitable and can focus on what works.
  • Tax compliant: With up-to-date, accurate records, a bookkeeper can assist you during tax season – helping you maximize deductions and stay compliant. 
  • Loan: As you grow, you may want to borrow money or open a line of credit. Your lender will want accurate financial statements, and ideally, you aren’t scrambling to create them right then and there.

What is catch-up bookkeeping?

A bookkeeper will review source documents such as your monthly bank and credit card statements, invoices, payroll, receipts, and record basic accounting information for you, such as your monthly reconciliations, in your company’s books.

 

Finacial documents in a assorted colored folder fan across a table.

Photo by Andrew Pons on Unsplash

How do I catch up on my bookkeeping?

To get ready to catch up on your bookkeeping, you’ll need to get organized and get ready to reconcile!

Gather your paperwork

Some of the paperwork and documents you will need to gather for your bookkeeper are:

  • Receipts
  • Bank and credit card statements
  • Invoices
  • Debt collections
  • Business expenses
  • Vendor accounts

Reconcile your bank accounts

  • Each month you need to reconcile all of your bank and credit card accounts. First, make sure all transactions for the month have been entered. Using your bank statements, you can make sure all of the transactions in your books match the transactions in your statements. This allows you to find any errors in your books and ensure your records are accurate.
  • It’s easy to fall behind on reconciliation, especially if you come across reconciliation errors that need fixing. If you are too far behind on your monthly reconciliations, the bookkeeping team at Xendoo can help you get organized, reconciled, and caught up.

Collect W-9s, 1099s, and W-2s

  • W-9s are IRS forms that all business owners must keep on file for any self-employed workers (such as freelancers and independent contractors), to keep track of their external team members. If you employ subcontractors, you’ll need to make sure you are collecting these important forms.
  • When a small business pays an independent contractor $600 or more in a given year, they must report these payments to the IRS using a 1099 form for the contractor. 
  • A W-2 form shows the amount of money an employee made, and the amount of taxes that were withheld from paychecks throughout a calendar year.

Go digital

  • Reduce the amount of paperwork you have to keep up with by choosing to have paperless bills and bank statements. 
  • A good choice for the environment, too.

 

Tow colleagues discuss as they sit at a table with their laptops open

How much does catch-up bookkeeping cost?

Starting at just $150, your dedicated Xendoo team will catch you up and set you up for success with a solid bookkeeping system, or you can utilize our ongoing bookkeeping services. Once you know how good that feels, you’ll want to sign on for a monthly bookkeeping service package that fits your business needs. 

You’ll never worry about falling behind again, knowing your dedicated financial team is on it, your up-to-date records are always available, and there’s an expert at your fingertips to answer any questions. You can count on using your books to make quick, smart decisions – leaving you with a healthy, growing business.

Leave catch-up bookkeeping to the professionals

It’s overwhelming to discover a pile of late invoices and frustrating when you can’t dial in your operating cash flow or realize you’ve over-extended your business expenses because of inaccurate books. Then tax time sneaks up, and you realize you’re non-compliant with the IRS and need someone to organize your financial data quickly. If you’re time-starved and neglecting your bookkeeping, it’s time to enlist Xendoo for your catch-up bookkeeping service. 

Let a professional sort your books for you and develop a bookkeeping system that will serve you well now and for the future. Xendoo can quickly and accurately catch you up, setting you up for success.

Always know your company’s financial status and sleep soundly at night with Xendoo’s expert support.

Articles on

Bookkeeping

9 Ways for Franchisees to Outrun the Competition

Editor’s Note: This post was originally published in October 2017 and has been updated for accuracy and comprehensiveness.

As we’ve seen, there are a ton of fantastic, low-cost franchise opportunities out there that will give you a lot of advantages in starting up your new business. As a franchisee, you’ll still have the independence of owning your own business and being your own boss, but you’ll gain the name recognition, volume pricing agreements, and support services of an established brand. It’s the best of both worlds, and over 795,000 business owners in the United States have chosen this path. But as much as a good franchise can boost your chances of success, there is one threat to your new franchise which will always be present—your business competition.

 No matter the type or location of your business, whether restaurant, child care center, gym, or staffing agency, you will always have to know how to overcome competitors. Even if you start out in a niche that you have all to yourself in the beginning, you will soon get some competitors because success always breeds imitators. For every McDonald’s franchise out there, there is almost always a Burger King franchise across the street. If there isn’t, there soon will be.  

So how do you stay ahead of your peers in this horse race? Here are a few things you can do to outperform your business’s competition.

Know your business competition

If you don’t know all about your competitors, you can’t know how to overcome your competitors in business. The reality is that a lot of business owners don’t know as much about their competitors as they should. Make a list and call it “My Local Competitors Are….” Write down who you think your strongest competitors are, and then mystery shop them. If you sell widgets, buy a widget from your competitor and compare it to yours. Were the prices comparable? Is the quality as good as yours? Maybe even a little better? Does it have any features that yours doesn’t?

If your business is a restaurant, go and eat at the restaurant across the street. Pay attention to the cleanliness, the service, the food quality, etc. If your competitor is a hotel, spend the night and take a walk through their parking lot at night to look for fleet vehicles that can tell you which companies to make sales calls on. Now you know where you stand in comparison and what you need to do to win customers away from the competition.

Perform a SWOT analysis

If you’ve never heard of a SWOT analysis, it stands for Strengths, Weaknesses, Opportunities, and Threats. In it, you draw a map with four quadrants using those labels and compile a list in each quadrant. First, define clearly and honestly what you believe the biggest strengths and weaknesses of your business are in relation to your competitors. What do they have that you don’t? What gives you an edge over them? Knowing that, you next identify the top opportunities you have to steal business away from your competitors, and which of your competitor’s strengths pose the biggest threat to your business. A SWOT analysis is essentially a high-level business plan because now you know which holes to patch in your ship and which to exploit in your competitors.

A customer interacts with a cashier at a small business

Solicit feedback from your customers

The most successful companies ask their customers to give them feedback about their experience. Have you ever eaten at a restaurant and received a code printed on your receipt for a free drink if you take a survey? Stayed in a hotel and received a survey? Visited a business and seen a sign that says “Tell Us What you Think!” with a QR code that you can scan? The ways to solicit feedback are endless, and you’re only limited by your creativity. You need to know what your customers like and don’t like about your business, and the only way to know is to ask.

Listen to your customers

Soliciting feedback is only half the job. The other half is what you do with it. When receiving negative feedback, many business owners instinctively become defensive and dismiss it as untrue, unreasonable, or uninformed. Sure, there are professional complainers out there and we’ve all run into them at one point or another, but they’re few in number and easy to spot. The vast majority of your customers are being sincere. If you don’t already, be sure to take the time to review and respond to your social media accounts for your business. These may be the first channels that your customers use to voice a complaint or offer a compliment. 

A complaint is a gift and should be treated as such because the customer is giving you an opportunity to fix a problem before going to a competitor. The worst complaint is the one you never hear because that customer just starts going to your competition and you’ll never know why.

Create a service culture around your customers

Do you know who your customers are? Be a “lobby lizard” and spend some time in the front meeting and shaking hands with your customers and getting to know them. It’s important to create a service culture around your customers because they are generally not as loyal to brands or products, as they are intensely loyal to people and relationships where they feel valued. Even in the face of fierce competition, customers are attracted to and will be loyal to companies that put them first.

Customers line up at a small business coffee stand

Sell the product, not the price

Try to avoid price wars with your business competition whenever possible, because that’s just a race to the bottom. Somebody else will always be able to absorb more loss than you until one of you is forced out of business. Instead, focus on creating value for your customer by providing a good product at a fair price combined with great customer service. Cheap isn’t always a bargain, and customers are often willing to pay a slightly higher price if they see a strong value proposition for their money. You don’t necessarily need to be the cheapest, you just need to create the most value.

Know your numbers

We’ve already established the benefits of outsourcing your bookkeeping and accounting to a professional accounting firm, and one of the most important is that you will receive professionally prepared financial statements that will give you an accurate and complete picture of what’s going on with your business. 

Do you know exactly what your margin is? Do you know your year-over-year performance in each category? If you don’t have that information at your fingertips, you’re flying blind. This is where Xendoo can help because we offer a complete suite of affordable bookkeeping and consulting services that can keep you on top of your business competition and help you make the right choices.

Prioritize your time

There are dozens of ways time gets away from us because it seems like there’s always a fire that needs to be put out. Being a business owner means everyone wants a piece of you, and you have to figure out how to balance everything and keep the wheels on the wagon. Start each day by taking five minutes to write down all the tasks that need to be done that day, and then prioritize them. In fact, studies have shown that just writing a to-do list can help reduce your anxiety.

Go down your list by priority and scratch them off as they get done. Additionally, by using technology, cloud software, and business automation, you can eliminate some time-consuming tasks, allowing you to focus on the big picture and beat the competition. 

Only do what only you can do

In addition to prioritizing your time so that the most important things get done first, you need to spend it as efficiently as possible so that you can complete the maximum number of tasks on your list. If you feel like you have to do everything in your business yourself, that means you’re a great employee but a terrible manager. Effective management is about delegation. There are some things that only the owner can tend to, but a lot of things – like accounting – can be either outsourced or delegated to someone else to allow the owner to focus on staying ahead of the competition instead of cleaning windows.

Business competition is a guarantee, but it doesn’t have to be a problem. Did you notice how many of these tips revolve around customers? That’s because, without them, you’re out of business. You may be the business owner, but you work for them because they can fire you at a moment’s notice and go to your competitor. Just remember that as a franchise business owner, you can choose your own destiny by focusing on your customers, creating value for them, and building relationships with them. 

 

Do that, and you will always stay one step ahead of the competition.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Articles on

Operations

A man in an oxford shirt looks at his bookkeeping on his laptop

Why You Should Outsource Your Online Bookkeeping Services

It’s common for a business owner to want to save money on outsourcing bookkeeping services and do it themselves thinking, What can go wrong… it’s just data entry!?” But, it’s all too common to make novice mistakes that can cost you a lot of time and money. Plus, your financials become more complex as your business grows – more expenses, and ideally more income! And you may want to borrow money or open a line of credit, so you don’t want to be scrambling to provide up-to-date financials for your lender right then and there.

Keeping accurate books takes a lot of time and focus which is why you need a bookkeeper.

What is outsourced bookkeeping?

When you don’t have the complexity or volume of transactions to require hiring a full-team bookkeeper or accountant (yet!), but you need a reliable source to delegate this important work to—choosing outsourced bookkeeping is the way to go.

The size of your business and the number of monthly expenses you incur play a large role in estimating the pricing for outsourced bookkeeping services. A popular option for bookkeeping services for small businesses are packages that charge a fixed amount every month because it’s easy to budget for, and it can cost less than half what you would pay hourly for the same amount of service. That’s why Xendoo offers this pricing structure with a variety of package options to fit your specific company’s needs.

Why should I outsource my bookkeeping?

Being a successful entrepreneur doesn’t equal being an expert at financials. One mistake can lead to tax issues and may require additional effort or redoing an entire month of books, so outsourcing bookkeeping services save you time, money, and stress. From entering transactions to monthly reconciliations to real-time tax coding, you gain accurate, up-to-date books and a dedicated financial team of experts who can answer questions regarding:

  • Tax savings advice, such as when to make capital purchases, what you can deduct, and how to reduce taxes on capital gains
  • Answer your questions about financial reports, cash flow, depreciation, and other accounting processes
  • Identify opportunities to improve profit margin and business growth
  • Help set up systems for business accounting and teach you best practices
  • Keep you tax-compliant and legal, prevent missed deadlines and noncompliance penalties

What are the benefits of bookkeeping?

Outsourced bookkeeping saves you time, money, and headaches! It can scale with your business as you grow, and it lets you focus on your business instead of just the books.

  • Time: Small business owners are notorious for spending a large amount of time on administrative work, like employee scheduling, preparing payroll, and especially hours (and hours!) of bookkeeping. It is estimated that small business owners spend 120 working days per year on administrative tasks like bookkeeping. And still, nearly 25% of businesses are behind on their books. 
  • Money: If you’re attempting to do all of your small business bookkeeping on your own, even utilizing programs like Quickbooks or Xero, you already know that you are spending a lot of time and money. If you’ve hired an hourly bookkeeper or accountant you know paying per hour can add up fast. Xendoo offers a flat-rate monthly fee, so you can easily budget for your bookkeeping each month and avoid huge unexpected bills from an hourly bookkeeper.
  • Stress: With so many business accounting software choices now available (Quickbooks, Xero, Freshbooks, Wave… the list goes on), you may assume that letting your computer do everything will be cheaper than the cost and the hassle of hiring a bookkeeper and accountant. But some things still need an expert. When you outsource your bookkeeping to Xendoo you won’t ever need to stress about having your books up-to-date, fixing your novice bookkeeping errors, or being tax compliant and ready.
  • Scale Up: As your business grows, your bookkeeping and accounting needs will grow, too. This means you’ll be entering in more and more transactions each month, making bookkeeping more difficult and time-consuming than before. If you want to take out a loan or open a line of credit to grow, your lender will want accurate financial statements. With Xendoo, you can quickly access your financial statements as soon as you need them.

Being able to quickly analyze the financial health of your business is key to continued growth and success. For a flat monthly fee that works with your budget, you’ll get Xendoo’s bookkeeping service featuring cloud-based software for always accessible, up-to-date financials, plus a dedicated bookkeeping and accounting team to answer any questions. Outsourcing your small business bookkeeping services to Xendoo to save time, money, and stress. 

Start making smart business decisions on the fly while gaining peace of mind with Xendoo.

Articles on

Bookkeeping

Cash Flow Management for eCommerce: 4 Tips for Smooth Sailing

Editor’s Note: This post was originally published in February 2017 and has been revamped and updated for accuracy and comprehensiveness. 

Cash flow is a measure of your business’s liquidity and ability to pay its debts from sales revenue. Cash flow management can be one of the most challenging aspects of being an online business owner. Your business can be profitable but still have a negative cash flow because profit calculation takes into account assets like inventory that you can’t use to pay bills. 

E-commerce businesses have an edge in cash flow management by virtue of the immediacy of the transaction, but that doesn’t mean online retailers are immune to cash flow problems. The customer has to pay you before you ship the item, so that means you don’t have to deal with an accounts receivables ledger full of aging accounts. But you still have operating expenses that can deplete your bank account, and you might end up having a lot of cash tied up in inventory before being sold. Fortunately, there are some things you can do to smooth out the turbulence and keep your cash flow – and your business – on an even keel. Read on to see our cash flow management tips to keep your eCommerce business sailing smoothly. 

Minimize Inventory

If your inventory is sitting on the shelf for more than 30 days, you have too much. You can’t afford to have that much cash tied up doing nothing. Use stock-keeping units (SKUs) to track the sell-through rate for each item in your inventory. The sell-through rate is the ratio of inventory sold during the month to new inventory added. If you see that an item’s sell-through rate is too low, you need to dig deeper and find out why. Are you producing too much of it? Is demand for it falling? Maybe some of the cash tied up in that product can be shifted to a more popular item that’s selling better, or it might even need to be discontinued. Don’t be lured in by bulk discount offers from suppliers unless you know for sure the item will move quickly. The right inventory management software can help you make sense of what is going, out, coming in, and just sitting there. 

Get Creative with Sales

At the risk of stating the obvious, one of the best ways to keep a positively manage cash flow is to get more sales from your eCommerce business. The big question, though, is how to do that. What’s the best way to drive traffic to your site and increase the conversion rate of your visitors, and maybe even do a little upselling in the process? Here are a few ideas you can try for driving website sales.

  • Offer free shipping on larger orders to encourage bigger quantities
  • Create a loyalty program for repeat customers
  • Offer Buy One, Get One (BOGO) on items with a high margin
  • Bundle high-margin products with best-selling products
  • Cross-sell by offering related add-ons at check-out
  • Offer a recurring purchase option for consumable products
  • Offer incentives to “abandoned cart” visitors
  • Use a human or automated chatbot to engage with visitors
  • Implement a Search Engine Optimization (SEO) strategy to improve your site’s rank in search results.

If each of these strategies can increase your site’s average order by just 1 or 2%, that can quickly add up to 10% or more extra revenue coming into your bank account to help ease the cash flow. If you do go the free shipping route, make sure to read our tips on how to reduce shipping costs

Manage Your Payables

The other side of cash flow management is what’s going out to your accounts payable. You need to maximize the amount of time the cash stays in your bank account instead of going to your suppliers. When you set up contracts with suppliers, try to negotiate the terms. Standard terms will typically be 30 days, but some suppliers may be willing to go as far out as 60 or 90 days if you ask. Whatever the terms are, you should generally wait until the end of the term to make the payment so you can hang onto the cash as long as possible. Watch out for late fees, though. However, if your supplier offers discounts for early payment, they may be worth taking advantage of.

Consider an Inventory Loan

If you’ve done your best but still find yourself in a cash crunch and need to restock inventory, an inventory loan may be an easier option than a traditional bank loan. Lenders will look at more than just your credit history and will take into account your sales history and the stability of your business. Inventory loans can be either lump-sum loans or lines of credit with the bank that you can use over time. You won’t be able to finance the entire cost of your inventory, but you can expect to be able to cover around 50% of the cost through a loan.

Managing your cash flow wisely can be the difference between success and failure for your eCommerce business, even if you’re showing a profit on the books. Xendoo’s suite of products and bookkeeping services for small businesses can help you know exactly where your money is going so that you can manage it more effectively. Contact Xendoo today to start your free trial and see how we can help your small business grow.

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Articles on

eCommerce

How to Pay Federal Income Tax Online

Yes, the IRS has entered the digital age! They offer several ways to pay your tax online.

Direct Pay with Bank Account

There’s no service charge to have the money taken directly from your bank. To make a payment or look up a payment you already made, go to the Direct Pay page on the IRS website. You can use direct pay service to make payments for:

Installment Agreement

1040, 1040A, 1040EZ, health care Form 1040or civil penalty

Tax Return or Notice

1040, 1040A, 1040EZ, health care Form 1040, retirement plan 5329 or tax-favored account 5329

Extension 486

for 1040, 1040A, 1040EZ

Estimated Tax 1040ES

1040, 1040A, 1040EZ

Notices CP2000, CP2501 or CP3219A

1040, 1040A, 1040EZ or health care Form 1040

Proposed Tax Assessment

1040, 1040A, 1040EZ or health care Form 1040

Amended Return

1040X or health care Form 1040

Civil Penalty

Installment agreement, advance payment or other amounts due

Offshore Voluntary Disclosure

1040, 1040A, 1040EZ or civil penalty

Offshore Streamlined Filing Compliance

1040, 1040A, 1040EZ or civil penalty

Credit Card or Debit Card

You can use an approved payment processor (listed on the IRS website) to pay by internet, phone, or mobile device whether you e-file, paper file or are responding to a bill or notice. The processor will charge a fee, which does not go to the IRS and may be tax-deductible.Note that when you e-file with integrated e-payment, the processing fees may be different. Visit the Debit or Credit Card payment page on the IRS website for more information.

Electronic Federal Tax Payment System

This option is mainly for large businesses or those who need to make large payments. It can be used to make any type of tax payment, including income, employment, estimate and excise taxes. You get 24-hour convenience plus next-level security with 3-step authentication.However, you must enroll in the EFTPS, which can take up to five business days, so it’s not a good choice if you’re trying to make an 11th-hour payment. Learn more about it on the IRS’s EFTPS website page.

Electronic Funds Withdrawal

This can be part of the e-filing process using tax preparation software or a tax professional; it is not available otherwise. The payment will be debited directly from your designated bank account.Visit the IRS Electronic Funds Withdrawal page if you have any questions.

Same-Day Wire

This isn’t really paying online, but it is electronic and thus saves time over snail-mailing a paper check. Inquire at your financial institution if they can wire your tax payment to the U.S. Treasury, and be sure to find out about their service fees and cut-off times. This may be a great option if you’re living overseas or have left your payment to the absolute last minute.To make it happen, go to the IRS Same-Day Wire page, download the Same-Day Taxpayer Worksheet, fill it out and take it to your financial institution.Don’t forget, your Xendoo tax professional can answer any questions about paying, calculating, or filing your taxes. It’s all part of our service, which takes the work and worry out of tax season and lets you get back to running your business.

 

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Articles on

Small Business Tips

2020 Year-End Checklist for Small Businesses

Every business needs a good tidying and updating at least once a year. The best time to do it is at the end of your tax year, which for many small businesses is the same as the calendar year. Get organized, review the data, and make your plans for a profitable 2020.

Weed out clutter.

Keeping old files around will only slow you down. Move anything that’s not current from your computer, desk and filing cabinet, into separate long-term storage. For digital files, it’s easy to put them on their own hard drive.

Back up all digital data.

A computer crash or natural disaster could permanently erase all your records. What a nightmare that would be! Put copies of your business files in both external hard drives and cloud-based services.

Digitize paperwork

Don’t wait until tax time to make sense of this mess. Scan tax documents to your Xendoo document storage portal and other important paperwork to a cloud storage provider. There are free resources such as google drive that offer cloud document storage. File documents according to tax year for optimal organization.

Catch up on your bookkeeping.

What you want is a summary of your annual profits and losses, which you’ll use to make decisions for the coming year. Where do you need to trim expenses? How can you improve sales? If you have accounting software, it’s been tracking the numbers, so all you need to do is generate a report.

Make tax-reducing moves.

Deductible expenditures — such as asset purchases and charitable donations — must be completed before the end of the year. (Ask your accountant for additional tax-saving ideas.) Check that you’ve made all your quarterly estimated income tax payments, to avoid incurring penalties.

Optimize your supply sources.

Take a look at the companies that sold your business products and services over the past year. Keep the ones that are doing a good job and find replacements for the ones that aren’t (late deliveries, too high prices, or whatever the problem is).

Analyze return on investment.

Retailers, identify and discontinue slow-selling products. Restaurateurs, remove non-selling dishes from the menu. You get the idea. Apply the same test to services your business uses. Does the cost of advertising justify the amount of new business it brings in? If not, it’s time to switch to cheaper media.

Work smarter, not harder.

Are you making the best use of your work time? Many small business owners get bogged down with routine tasks that could easily be delegated — or may not even be relevant anymore. As the company leader, you should be focused on activities that will move the business forward. To see where the problems lie, write down all your work-related activities and how much time you spend on each of them.

Learn from your successes.

This annual business clean-up isn’t only about fixing what’s wrong, it’s also about recognizing what you did right. Make a list of your achievements in 2019: acquiring new customers, launching a new product, receiving great reviews on Yelp, giving your employees a raise, updating your website, learning something new, etc. Now figure out how to build on those positive steps for even more success in the year ahead.

Call in help as needed.

It’s smart to know when you just can’t do it all yourself — either for lack of time or knowledge. For example, your bookkeeping may be months behind and there’s no way you can get it all caught up at once. That’s where outsourcing to a small business accounting specialist like Xendoo could be your best move. In fact, our catch-up service can clear even extreme backlogs, usually in less than two weeks.

Now that your business is all brushed up and caught up, you’re ready to ring in a new year of growth and success!

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Articles on

Small Business Tips

How the right payment processing platform can help save time and money

As a small business owner, finding ways to optimize your business is critical to the success of your operations. Having the ability to accept payments in a fast and efficient manner is at the core of running a successful business. That said, it is extremely critical to invest in a payment processing tool that allows you to maintain optimal efficiency while saving you time and money. Here’s what you should look for in your payment processing platform in 2021: 

Pricing transparency 

 

When it comes to payment processing there can be quite a bit of uncertainty when it comes to pricing. Many processors have hidden fees and charge for additional line items not initially disclosed to the business. When deciding what payment processing platform would be best suited for your business make sure to do your homework. Find out if the company charges different pricing tiers for different card types. With a tiered pricing model, similar transactions are grouped and categorized into tiers, each tier is then charged a different rate. Depending on the types of transactions, you could be paying upwards of 4% in processing. When thinking of tiered pricing think – your hard-earned money down the drain. 

 

As a general rule of thumb, try to steer clear of pricing models that seem “too complicated” and opt-in for a flat fee or subscription pricing whenever possible. Subscription pricing removes the uncertainty that often plagues business owners thanks to its fixed monthly rate. Businesses know exactly what they’re paying for each month and save a great deal on processing. 

Cutting-edge technology 

 

As the adage goes, time is money. And this remains true when selecting a payment processing solution. Not only is it important to pick a platform with transparent pricing that saves money, it’s also important to choose a technology-forward solution that allows you to operate your business smarter. Your business needs an all-in-one platform that equips you to operate at peak efficiency. With that in mind, here are some features you may consider when selecting a payment processing solution: 

Integrations 

 

What business tools do you use most often? Do you use Quickbooks for your accounting? Do you use shopping carts for your website? Be sure to find technology-forward solutions that allow you to integrate with your top-level business needs. For example, Fattmerchant provides you with direct integration into QuickBooks Online. This integration syncs information in two ways, changing the way you manage your payments.

Dashboard and Analytics 

 

Business owners need access to data to make profitable business decisions. That’s why features that allow you to get a full-throttle view of your data are critical. When possible opt-in for a payments solution powered by data and analytics. Features like a high-level summary, that shows sales trends in a simple view, allows you to be aware of growth or areas of concern for your business. A heatmap highlights your busiest times of day (and slowest) helping you make smarter staffing decisions and more impactful offers and promotions. Find solutions that make running your business simpler and comprehensive. 

Customer Support

 

When things go wrong, businesses need to know that they are taken care of and will be able to resolve their queries quickly. The lack of timely support can be detrimental to a business since it can impact your cash flow and ability to run your business effectively. This makes it increasingly important to find a processing solution that offers around-the-clock support and has systems in place to answer your queries so you can operate your business at the highest caliber.  Look for companies that offer dedicated, reliable, and timely support – via chat, email, and phone. A good way to see if a company offers this is by looking at company reviews on sites like Merchant Maverick and Software Advice. 

 

Payment processing is an important facet of your business and should not be taken lightly. Invest in a solution that offers the best savings, technology, and customer support, and run your business at peak efficiency. 

About Fattmerchant: 

 

Fattmerchant is a merchant services company with an innovative payment technology platform that saves its customers an average of 40% per month on their credit card processing fees with their subscription-based pricing model. With its integrated payment platform, business owners and partners have access to the card-present and card-not-present solutions they need to process payments and invoices, robust data analytics on those transactions, and advanced business tools such as their integration to QuickBooks Online. For more information on Fattmerchant + Xendoo partnership, visit Fattmerchant.com/xendoo-lp/. 

 

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

Articles on

Small Business Tips

How to Collect Sales Tax on Shopify

There’s no doubt about it, sales tax is getting more complicated for all e-commerce businesses. Ever since the 2018 Supreme Court ruling on South Dakota v. Wayfair, U.S. states have been free to make their own tax nexus rules.

No longer is it just about having a physical presence in the state — a store, branch office, employee, or stored inventory — in order to trigger nexus. Now more than 40 states have “economic nexus” which includes any business that sells and delivers taxable merchandise or services into the state. And they each have their own specifications for total annual revenue and/or a number of transactions, as well as types of goods and services being sold, that would make you liable for collecting and remitting sales tax.

That means you could be responsible for sales taxes in 40+ different states, whereas just a few years ago it might have been only one: your home state. Here’s how to do it:

Figure Out Where You Need to Collect Tax

This will involve researching each state’s requirements, then estimating — based on current and previous sales records —whether you’re likely to meet their nexus thresholds.

Don’t forget that physical nexus hasn’t gone away. If you use Shopify Fulfillment Network, you’ll need to know the locations of the warehouses they’re shipping your merchandise from. You’ll need to report taxes in each of those states.

Register for a Sales Tax Permit

Information and application forms are available on each state’s Department of Revenue website.

Once registered, you’ll be assigned a sales tax frequency — monthly, quarterly or annually depending on your sales volumes. Be sure to keep a record of the due dates so you don’t get hit with late penalties and interest.

Set Up Tax Collection on Shopify

Fortunately, the platform does a lot of collecting work for you. Once set up, it will automatically calculate the tax for each state and add it to the customer’s purchase.

1. From your Shopify administrator’s page, go to Settings > Taxes

2. Choose the Tax Region

3. Choose from two ways to set the tax rate:

  • Automatic rate calculation
  • Manual rate inputs for the state, county, municipality and shipping charges

4. Exempt certain products if they are not taxable

5. Choose whether to display your prices with taxes included

File Your Return

Although Shopify collects the sales tax from customers, that’s only the first step. It’s up to you to pass that tax money on to the state. There are two ways to do it:

  • Online through each state’s revenue authority website
  • Automatically with your accounting software, if it has a sales tax function

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Articles on

Small Business Tips