FREE Review of Your Books Learn More > 

Client Login

877.342.7763

Client Login

Sign Up
Sign Up
Get Started

Tag: accounting software

10 Accounting Tips for Small Businesses to Keep the Books Balanced

In the ever-evolving business landscape, small to medium-sized businesses (SMBs) are increasingly adopting innovative tools to streamline operations and enhance financial management. One crucial determinant of success for any SMB is how it handles its monthly finances. Good accounting practices not only conform a business to regulations but also create valuable information that can help the business grow. In this article, we provide 10 actionable accounting tips to help small businesses keep their books balanced and achieve financial stability. Tip 1: Keep Personal and Business Finances Separate Maintaining separate accounts for personal and business finances is fundamental to clear and accurate bookkeeping. Mixing personal and business transactions can lead to confusion, errors, and potential legal issues. By opening a dedicated business bank account, you ensure that all business expenses and income are recorded separately. This not only simplifies tax preparation but also provides a clear picture of your business’s financial health. Actionable Advice: Start by setting up a dedicated business bank account and, if needed, a separate credit card for business expenses. This will help you track business expenditures accurately and maintain clear records. Tip 2: Use Cloud-Based Accounting Software Embracing cloud-based accounting software can revolutionize your financial management. Unlike traditional software that requires installations on individual desktops and frequent updates, cloud-based solutions offer real-time access to your financial data from any internet-connected device. This flexibility is crucial for informed decision-making and strategic planning. Recommendations: Popular cloud-based accounting software options include QuickBooks Online, Xero, and FreshBooks. These tools offer features such as automatic backups, real-time data syncing, and integration with other business applications. Actionable Advice: Choose the right software based on your business needs and get started by migrating your existing financial data to the cloud. This will not only enhance your efficiency but also provide you with accurate, up-to-date financial information at your fingertips. Tip 3: Track Every Expense Accurate expense tracking is essential for maintaining balanced books and making informed financial decisions. Every business expense, no matter how small, should be logged and categorized appropriately. This helps in monitoring cash flow, managing budgets, and preparing for taxes. Actionable Advice: Utilize digital tools and receipt management apps to log expenses in real time. Regularly update your records to ensure no expense goes untracked. Tip 4: Regularly Reconcile Your Accounts Regular account reconciliation is crucial to prevent errors and discrepancies in your financial records. By comparing your internal records with bank statements, you can identify and rectify any inconsistencies promptly. This practice helps in maintaining accurate financial records and avoiding potential issues during audits. Actionable Advice: Schedule monthly or quarterly account reconciliations. Use accounting software that automates this process and alerts you to any mismatches. Tip 5: Monitor Your Cash Flow Cash flow management is vital for the stability and growth of your business. By keeping a close eye on your cash inflows and outflows, you can ensure that your business has enough liquidity to meet its obligations and seize growth opportunities. Actionable Advice: Create cash flow statements and forecasts to predict future cash needs. Use these insights to plan for expenses, manage shortfalls, and make informed investment decisions. Tip 6: Keep Detailed Records Maintaining detailed records of all financial transactions is essential for transparency and accuracy. This includes invoices, receipts, bank statements, and tax documents. Thorough record-keeping not only aids in financial management but also ensures compliance with regulatory requirements. Actionable Advice: Implement a systematic approach to record-keeping, using both digital and physical storage methods. Regularly update and back up your records to prevent data loss. Tip 7: Set Aside Money for Taxes Preparing for tax liabilities is crucial to avoid financial surprises and penalties. By setting aside money regularly for taxes, you can ensure that you meet your tax obligations on time and avoid the stress of last-minute scrambling. Actionable Advice: Estimate your tax liabilities based on your income and expenses. Set aside a portion of your revenue each month in a separate tax savings account. Tip 8: Review Financial Reports Regularly Regularly reviewing financial statements is key to making informed business decisions. Financial reports such as income statements, balance sheets, and cash flow statements provide insights into your business’s financial performance and health. Actionable Advice: Schedule regular reviews of your financial reports. Use these reviews to identify trends, spot potential issues, and make strategic decisions. Tip 9: Hire a Professional Accountant and/or Bookkeeper Seeking professional accounting or bookkeeping help can provide significant benefits, even for small businesses. Bookkeeping involves the day-to-day recording of transactions, maintaining accurate financial records, and managing receipts and invoices. An experienced bookkeeper ensures your financial data is up-to-date and organized. On the other hand, accounting encompasses a broader scope, including analyzing financial data, preparing financial statements, and providing strategic insights. An experienced accountant can offer valuable insights, ensure compliance with regulations, and help optimize your overall financial management practices. Actionable Advice: Consider hiring an accountant or bookkeeper on a part-time or freelance basis if a full-time hire is not feasible. Look for professionals with experience in your industry and a solid track record. Alternatively, consider xendoo. xendoo specializes in providing tailored bookkeeping and accounting solutions for small businesses. By choosing xendoo, you gain access to a team of experienced professionals who can help manage your financial records and offer strategic insights, ensuring your business thrives. Tip 10: Plan for the Future Financial planning and setting long-term goals are essential for business growth. By creating a financial plan, you can align your resources with your strategic objectives and ensure sustainable development. Actionable Advice: Develop a financial plan that includes projections for revenue, expenses, and cash flow. Regularly update your plan to reflect changes in your business environment and goals. Conclusion Balanced books are the foundation of a successful small business. By implementing these 10 accounting tips, you can achieve greater financial stability, make informed decisions, and drive your business toward growth and profitability. At xendoo, we specialize in providing cloud-based accounting services tailored to the unique needs of small businesses. Our goal is

From Startup to Success: How Proper Accounting Practices Fuel Business Growth

It is exciting to start a business, but beyond having a great idea, one needs to work out many things as well. Small and medium-sized enterprises (SMEs) frequently need help shaping their brand in a constantly changing environment where invention, market comprehension, and efficient management are key factors. One crucial thing that may become a success or failure determiner for a startup is how it handles its financial affairs. Good accounting practices not only conform a business to regulations but also create valuable information that can grow the business. This article discusses how entrepreneurial accounting helps progress from a startup to success. Understanding the Essence of Bookkeeping Accounting combines precise and well-kept bookkeeping, which is vital in every flourishing business. Bookkeeping ties these deals together by registering any financial transaction: sales, purchases, receipts, and payments. Maintaining flawless and up-to-date records for small business owners involves keeping records of how income and expenses are split, how cash flow is managed, and how taxes are prepared. Based on my experience, the critical idea of a successful SMB accounting system is in high demand. Bookkeeping hit the boundary of causing calculated mathematical operations, including all processes of systematic transaction recording, accurate expense tracking, and the efforts in managing the cash flow. Getting bookkeeping help from expert firms like xendoo may jump-start your small business’s journey to success. Not only does it aid in time management, but it also guarantees the accuracy of financial records in line with regulations. The fact that xendoo.com exists as an accounting outsourcing firm makes it, unlike an ordinary accountant or calculator. When a CEO outsources the handling of the finances to the experts, they can free time and gratis it again to impelling business growth while upgrading their company’s finances. This allows them to channel their energies into what they do best – their most apt trade. Challenges Faced by Small Business Owners Accounting requirements can be challenging for many small enterprises because they grow without basic operational procedures during the initial business period. Time pressure, resource scarcity, and the lack of professional skills that contribute to the quality of financial management are relatively common obstacles. As a result, wrong entries in bookkeeping may emerge, which can result in financial discrepancies, missed tax deadlines, and, in the end, exactly, threaten the sustainability of the business. In addition, companies with expanding operations and a large quantity of paperwork will see a wide variety in their transactions boom at an equal charge. During those moments, guide bookkeeping systems cannot reply to operational worries, making printing errors vital. Small commercial enterprise owners increasingly turn to outsourced bookkeeping services, which offer a strategic alternative for financially retaining a commercial enterprise, even permitting the owner to pay attention to their number one duties. The Advantages of Outsourced Bookkeeping Engaging a bookkeeping company is like a gift in a box since businesses can handle bookkeeping alone or pay high organization accounting fares. Another main advantage is the availability of talented accountants, no complete staff hiring, and, therefore, managers. These experts ensure compliance with the rules and, if necessary, inspect compliance through audits and checklists. Unlike these, contracting out in one way or another allows the proprietorships to grasp all over their production schemes, connections, and clients to achieve all-over productivity and scalability. Moreover, software of such power helps individuals navigate processes that let them eliminate errors or missteps and take quick actions from the software, making them a top competitor. Driving Business Growth Through Effective Financial Management In today’s competitive world, where rival features are constantly emerging, agility and adaptability are crucial for either survival or growth. Well-structured accounting practices provide small business owners with the necessary inputs for decision-making, identification, and handling of risks, as well as opening up to the opportunities that may be available. Through precise financial records, businesses can focus on the trend of cash flow, monitor expenses, and identify when efficiency is sliding low or the company is overspending money. Furthermore, strategic financial planning empowered by outsourced bookkeeping services supports businesses in devoting the resources where they are needed and choosing the investments that make the best economic sense. All these financial decisions are taken if you deal with expanding operations, new products, or entering new markets, but they create a base for sustainable development and profitability. Moreover, outsourcing the bookkeeping processes will associate the business with credibility and reputation, build trust with shareholders, and invite investment or partnerships. Credible and trustworthy financial reporting will favor transparency and fiscal responsibility, again showing that these features are essential for building a marketplace. Navigating Growth: Solutions Offered by xendoo.com xendoo.com gives small and medium-sized businesses (SMBs) the tools they require to explain and manage their financials and, in turn, to grow sustainably and remain competitive. xendoo.com, being a bookkeeping expert platform, helps local businesses (SMBs) take control of their finances and minimize time and resources that can be used to perform their core business activities. By carefully developing and optimizing tax planning strategies, xendoo.com translates those savings into business growth, boosting financial resources strategically. Apart from CFO services outsourced through xendoo.com, owners and business managers can set strategies that place them in superior decision-making characteristics. SMBs, having a partnership with xendoo.com, could work with a group of relying professionals with the required competencies and tools for the successful handling of financial challenges and for maximizing profit. Success as SMBs see the light at the end of the tunnel with xendoo.com by their side, and it’s just a matter of time before they reach the echelons of successful businesses with confidence and clarity of purpose, finally digging their feet deep in the path to a sustainable future. In conclusion, accounting discipline is necessary for the growth and sustainability of small and medium-sized enterprises. To eliminate difficulties in financial accountability, entrepreneurs should consider the utility of outsourced bookkeeping. Such a move would boost the overall development of the business. It is catching up because effective bookkeeping makes perfect record-keeping, a strategic tool

The Backbone of Growth: Why Bookkeeping is Essential for Scaling Your Business

Small Business Owners are almost always forced to balance various aspects to ensure their operations run smoothly. Apart from taking care of day-to-day chores and making growth plans, business owners always have a lot on their plates. However, one aspect worth highlighting is bookkeeping. While often overlooked and sometimes seen as routine by small business owners, it is the foundation for growth. Bookkeeping is the backbone of growth for small businesses. This article delves into the role of bookkeeping in scaling up small businesses and the benefits of outsourcing this task to professionals like xendoo.com. Understanding the Importance of Bookkeeping In reality, bookkeeping is more than just keying in transactional data; it involves financial analysis to ensure that the business remains healthy financially. Good bookkeeping will ensure that small businesses have accurate, current reporting of financial statistics on a company. It provides a platform to record revenue, control outflows, maintain up-to-date liquidity, and make well-grounded decisions for the future of the business. Bookkeeping is essential and even more critical for small businesses attempting to grow. It lays the groundwork for the financial plan and the budget. Through these tools, one can dedicate time to expansion and areas affected by risks. There must be sufficient information for businesses to address their opportunities and overcome challenges with an enterprise account. Challenges Faced by Small Business Owners Although it is undeniably vital, keeping accurate bookkeeping records for small businesses can be challenging for many owners. The reality is that most small businesses face these challenges: limited time, resources, and skills are among the factors that make it difficult to have accurate and complete accounting records. An issue that small businesses also face is the intricate tax laws and regulations, which make things more complicated. All small business owners, however, have to be wary of poor bookkeeping practices and their consequences. Only complete or reliable financial documents may result in missed chances of taking tax deductions and due date penalties, discouraging the firm from pursuing the tax deductions. Moreover, it can also cause legal problems. It can also be challenging to raise funds or find a pool of investors; thus, the business may need to improve its growth mission. Outsourcing Bookkeeping: A Smart Solution Handing over bookkeeping tasks to a third party can be a very effective way for a small business with bookkeeping struggles to cope. Outsourcing provides the owners with the freedom to run the business and allows experts to manage the financial records. Money is conserved, and resources are utilized efficiently because the books are always up-to-date and accurate. xendoo.com helps small businesses run by providing accounting services according to their specific requirements. Whether you need help with daily bookkeeping duties or catching up on your past-due debt, xendoo.com is always available to help you. Their team of veteran professionals who are aware of the distinctive problems affecting small businesses and may even provide you with all the support that you need to grow. Along with expanding a business comes the escalating number of bookkeeping tasks. Delegating financial reporting to xendoo.com is a sure means of ensuring that the balance of your business’s size and efficiency remains. xendoo.com has helped several small enterprises save time and money by outsourcing their bookkeeping to xendoo.com. Partnership with xendoo.com has resulted in improved operations, the allocation of fewer resources, and, ultimately, better financial outcomes for these companies. xendoo.com Your Partner in Financial Success xendoo.com is not confined to mere bookkeeping services; it is your companion for better business dealings. xendoo.com has a team of experienced professionals actively assisting small businesses’ success. They offer a broad range of services to streamline financial management and enhance growth. The strength of xendoo.com lies in its capability to develop unique and personalized solutions for businesses of all sizes. Whether you’re a start-up business aimed to secure a sound financial basis or a well-established one endeavoring to go big, Xendo.com’s experts plan thoroughly with you, considering your business specificity and defining a roadmap of the firm’s goals. The Spine of xendoo.com‘s services lies in effectiveness and reliability. At xendoo.com, we use current technology and standard accounting procedures to provide timely and accurate financial reports that are always compliant. Besides the function saving you time, it minimizes the chance of mistakes, and you avoid penalties. From identifying cost-saving opportunities to boosting future sales, the experienced Xendo.com advisors are here and ready to offer guidance to help you grow. Besides being just a bookkeeping company, xendoo.com also offers various services catering to all your financial requirements. Whether you need tax preparation CFO services or a catch-up service to repair your finances, xendoo.com can help you. The website xendoo.com allows small enterprises to succeed in this challenging world through custom solutions, strategic advice, and broad services. Are you a business owner seeking profitability and success at the next level? Give xendoo.com a try and experience the difference.   Conclusion: Invest in Your Business’s Future with xendoo.com In summary, records management is a default for scaling your business. You can get a snapshot of the financial state of your business if you invest in the art of correct bookkeeping, which will help you make the right choices regarding the future of your business. Through xendoo.com, you can only relax and be sure that there is no possible threat your records might face. About xendoo We share your passion for small businesses and are inspired by your dedication to making your dreams a reality. That’s why we’re committed to providing you with the financial visibility and support you need to thrive. More Than Just Numbers It’s more than simply crunching numbers. It’s about building meaningful relationships with our clients and understanding their needs. Our people-first mentality ensures you receive personalized attention and expert guidance throughout your financial journey. A One-Stop Solution xendoo offers a comprehensive suite of services, including: Full-service bookkeeping and accounting team to free up your time and resources. Hassle-free tax preparation and filing Fractional CFO Services to work with you

7 Last-Minute Tax Tips: Quick Actions Small Business Owners Can Take to Meet the April 15th Deadline

tax tips for small businesses

As the April 15th tax deadline approaches, small business owners are on a tight schedule to get their financial books in order and finalize their tax filings. Timely tax preparation ensures compliance with the Internal Revenue Service (IRS) and can maximize potential tax savings. This becomes a critical period in business, and specific strategic actions must be taken so that small businesses remain compliant, maximize returns, and minimize liabilities when filing taxes. This article provides seven actionable tax tips to help small business owners navigate the crunch time effectively. Organizing Financial Records Gathering Necessary Documents and Receipts As one of the basics for filing taxes, small businesses must gather all pertinent financial documents, such as invoices, bank statements, expense receipts, and payroll details. Gathering these documents helps small businesses aggregate and systemize these records to afford a vast, complete record base for use in tax preparation and filing. Utilizing Accounting Software for Efficient Record-Keeping Accounting software simplifies record-keeping, facilitating easier tax preparation and real-time financial tracking. Nowadays, small business owners are privileged to have several programs dedicated to clientele and account record-keeping management. Up-to-date accounting software helps your business to integrate seamlessly with other leading accounting software platforms. It offers you direct access to ensure your business’s financial data is accurate and up to date for filing taxes. Thanks to such tools, financial data can be structured and sorted according to the classification rules in preparation for tax filing. Creating a Checklist to Ensure Nothing Is Overlooked For small business owners, a broad checklist will guard against the usual omissions and assure the inclusion of all required documents and information, which are requisites during the preparation to file taxes. A checklist should comprise the fields of income, deductible expenses, tax documents, and any specific information related to their unique business type. At the end of this financial review, the business owner should have a checklist covering all financial records. Maximizing Deductions and Credits Identifying Eligible Business Expenses Understanding what makes up a deductible business expense helps ensure small businesses make the most of tax-saving opportunities. From home computers and vehicles to social networking-related expenditures to staff and benefits, all business owners should be careful to keep relevant documentation as this will enable them to use the deduction system to the utmost extent. Identifying eligible business expenses helps small business owners take advantage of all possible deductions. Exploring Available Tax Deductions and Credits for Small Businesses The tax code gives an array of deductions and credits meant to support small businesses. Alongside typical business expenses, SME proprietors must check for available pertinent deductions to their sector. For instance, the Small Business Health Care Tax Credit, the Research and Development Tax Credit, and several state and local incentives are all geared towards the same purpose: promoting small businesses. We guide you to strategically employ the most recent tax benefits to lower your taxable income and increase your tax savings. At xendoo, we also keep up with the latest tax benefits to ensure that businesses signed with us get the most out of the benefits. Strategizing to Maximize Tax Savings Strategic tax planning is essential to optimizing small business outcomes. With a thorough knowledge of eligibility for deductions and credits, entrepreneurs can now employ tactics that help them minimize tax liability. This could involve reformatting certain parts of the business systems or making good use of the timing of investments and purchases by aligning them with tax compliance. Our bookkeeping services include expert professional advice on the structure of transactions and operations to maximize available benefits and opportunities by saving more on your tax bill. Navigating Tax Law Changes Highlighting Recent Changes in Tax Laws Affecting Small Businesses Tax laws are constantly changing, and they significantly affect small businesses. Significant updates and modifications are made to initial tax laws as often as monthly. Business owners should consider keeping themselves updated with recent amendments that may frame their filing of return of income, which otherwise can be detrimental to the company due to delayed payments and, in some extreme cases, penalties. Let us help you stay updated with all the changes to ensure your business stays compliant and takes advantage of new opportunities the tax law updates might create. Understanding Implications and Opportunities Presented by Tax Law Updates Effective tax planning considers the implications and impacts of the changes in tax laws and their applicability. Each tax legislation change has pros and cons because of its diverse impacts. Both partnerships and LLCs need to be fully informed about these impacts regardless. These changes bring about essential tax savings if carefully considered. Our book-handling services provide you as a business owner with expert analysis on how changes in tax laws impact your business and alert you to opportunities that will see new provisions for tax savings. Consulting with a Tax Professional for Personalized Guidance Most tax law changes require interpretation. Accounting for complicated tax laws and the high rate of environmental changes leaves small companies with only one option: to reach out to experienced tax lawyers or accountants. These professional consultants can offer personalized advice and tailor it to the specific needs and circumstances of the business so that any unclaimed deductions and credits are discouraged and errors are avoided. Our people-first mentality ensures you receive personalized attention and expert guidance throughout your financial journey. We share your passion and your dedication to making your dreams a reality inspires us. That’s why we’re committed to providing you with the financial visibility and support you need to thrive. We build meaningful relationships with our clients and understand their needs. Utilizing Technology for Efficiency Overview of Tax Preparation Software Options The right tax preparation software can greatly increase efficiency and accuracy during tax filing. In the digital era, small business owners have many tax preparation software applications that can facilitate filing by shortening the time to prepare the returns. Be it user-friendly tools designed specifically for small businesses or more comprehensive solutions covering complex tax scenarios,

What Is Net Income Formula and How to Use It

a man reading a book about financial planning

Net income is one key metric that you can use to assess your business’s financial health. It is the bottom line on your income statement, also called a Profit & Loss Statement (P&L), and it tells you how much money you have remaining after deducting your costs and operating expenses from your total sales. What Is Net Income? Net income can be compared to “take-home pay” for an employee. It’s the amount of money remaining after taxes, insurance, and other expenses are deducted from your total pay or gross income. Similarly, a business’s net income is the amount of money remaining after deducting all business expenses, including wages, interest, product costs, operation costs, and taxes. Net income, also known as the bottom line, net earnings, or net profit, appears at the bottom of income statements. Generally, a healthy, growing business will have positive net incomes and increase consistently. In other words, the more you increase revenue and decrease expenses, the healthier you are. The net income or net loss of your business may also show up on your balance sheet as retained earnings. Retained earnings are the amount of money that is held (not distributed to shareholders) to sustain and grow the business. How Do You Calculate Net Income? The net income formula helps calculate the net income of either an individual or a business.  Calculating net income is fairly straightforward for individuals. You take the total amount earned (gross income) and then deduct all expenses, such as interest payments and taxes. It is a little more complicated for businesses.  Net Income Formula Businesses can use the net income formula to calculate net income for any timeframe. There are two primary ways to calculate net income: revenue and expenses or gross profit and expenses. We’ll go over each net income formula and how to use them.  Total Revenue Total Revenue = Quantity Sold * Price – Discounts Cost of Goods Sold COGS is the cost of the product or the service being delivered. If you have a t-shirt company, it is the wholesale cost of the t-shirt, plus freight, labor, and printing costs.  If you provide consulting services, it is the cost of labor to provide the consulting. Gross Profit Gross profit represents the profit made on selling the product or service.  This provides insight into whether your pricing brings you the desired profit on each sale. Gross Profit = Revenue – Costs of Goods Sold  Operating Expenses Operating expenses are running the day-to-day business, including advertising & marketing, rent, payroll, insurance, software, website, postage, auto expenses, meals, travel, and more.  These are the below-the-line (Gross Profit) costs. Net Income Net Income = Gross Profit – Operating Expenses It’s important to note that net income can be a net loss. If your operating expenses exceed your gross profit, you have a net loss. When your operating expenses are less than your gross profit, you have a net income. Often, when a business is in start-up mode, a net loss is not surprising.  Although a net loss has a tax benefit, it doesn’t lead to a sustainable or scalable company without further investment. It’s also important to note that net income may include revenue that is not from your core business activities. For example, if your business owns real estate and rents out part of it or gains royalties from a past partnership, this is generally referred to as non-operating income.  Business Net Income Example Let’s look at a hypothetical business scenario to understand the net income formula fully.  Marcus’ Archery, a company specializing in manufacturing and selling archery equipment, wants to calculate its net income for the fourth quarter. Here are the necessary figures to calculate net income from its accounts:  Total Revenue: $20,000,000 Costs of goods sold (COGS): $8,750,000 Rent: $150,000 Utilities: $40,000 Payroll: $250,000 Advertising: $70,000 Interest expense: $70,000 According to the net income formula, Marcus’ Archery first needs to calculate Gross Profit. You would do this by subtracting the costs of goods sold, including direct labor costs, from the total revenue.  $20,000,000 (Total Revenue) – $8,750,000 (COGS) = $11,250,000 (Gross Profit) $150,000 (Rent) + $40,000 (Utilities) + $250,000 (Payroll) + $70,000 (Advertising) + $70,000 (Interest Expense) = $580,000 (Total Expenses) Marcus’ Archery can now calculate its net income with all these results. You use the net income formula to subtract total expenses from gross income to do this. $11,250,000 (Gross Income) – $580,000 (Total Expenses) = $10,670,000 (Net Income) The fourth quarter’s net income for Marcus’ Archery is $10,670,000. Cash Flow vs. Net Income These are simplified explanations of how to calculate net income. However, net income does not equate to how much money is in the bank.  We often hear questions like, “I made $100,000 this year, but why don’t I have $100,000 in the bank.”  That is because cash flow is very different from net income Factors like credit cards, business loans, owner’s payments, or investment income affect the money in the bank but aren’t factors in net income. You can learn more about cash flow vs. profit and how to use cash flow for decision-making in our blog.  Individual Net Income Example We focus on business bookkeeping and accounting at xendoo. However, looking at an individual net income example can help you better understand how it differs from calculating the net income for a business. Let’s consider Nancy, an employee at a local ski shop. Nancy receives her paycheck every two weeks with gross pay of $4,500. She also receives $200 in interest and $600 in equity as her other forms of income.   She then pays all her taxes, including:  Social Security taxes ($279) Federal taxes ($450) State taxes ($163.91) Medicare taxes ($65.25) Insurance ($280)  These are usually automatically deducted from your paycheck. After all these deductions, Nancy has a net income of $4,061. Here are the exact steps to calculate it.  Gross Income – Total Expenses = Net Income  For Nancy, the math would be like this:  $4,500 (Gross Pay) + $200 (Interest)

Standing Out in a Crowded Market: How to Differentiate Your Business in a Competitive World

small business owners going over their finances

Undoubtedly, part of owning a business is understanding that you may face high competition and crowded industries. Knowing how to make your business stand out and what sets it apart from the competition is vital to keep it from fading into the background. In other words, you need to know how to differentiate your business to sell. And once you figure that out, you’ve got to shout it from the rooftops. What Exactly is a Differentiator? The basic definition of a differentiator is a unique set of benefits that sets your business apart from your competition. Understanding what you are good at and highlighting those qualities shows your customers why you are worth putting above your competition and spending more on your product. Overall, differentiators validate your customers in their purchase, and a person who feels confident in their purchase is more likely to continue purchasing from you in the future. Types of Differentiators Though understanding what you’re good at may sound easy, it can be tricky to figure out. Your company can have many types of differentiators. Some of the more popular differentiation factors are based on the customers’ experience, the price of your product, or even your specialization for a specific target market or industry. Pricing your services effectively can also be a powerful differentiator. Say your company’s differentiator is the experience you give your customers and the personality of your business. If you go above and beyond to give your customers a great experience when they are shopping, they’ll remember it. In the best-case scenario, they will tell their friends about how friendly your employees are and how great of an experience they had. Another example could be your expertise in serving a very specific target audience. Say you own a marketing agency that specializes in serving law firms. When a law firm looks for a marketing agency, it’ll appreciate finding one with lots of experience in its field. Questions to Ask to Help Identify Your Differentiators? Having trouble putting your finger on what makes your business special? Don’t worry. We have some simple tips and tricks that can help you. Ask yourself what you do that your competition does not. This is a chance to do market research and analyze how your competition works. Take a look at how they’re advertising themselves. What do they highlight most? What don’t they talk about? Next, list everything your business does that others aren’t talking about (or that you know they don’t do well). Then, write down a list of all the ways you overlap with your competition. Writing down your similarities and differences is a quick and simple exercise that can have long-term benefits and lead to a quick conclusion about your differentiators. Ask yourself what your customers get from choosing your business. This is another way of saying you must be familiar with your customer’s experience. Customer experience: The interaction between a business and a customer over their entire relationship. Map out your company’s entire customer journey. What happens from the first time they hear about your brand through when they become happy, loyal customers? Putting yourself into your customer’s shoes shows you what they’re experiencing as they engage with your business and what benefits they see. From here, you can ask yourself: What type of customers do you help? What are your customers happiest about? Still Having Trouble? Go Straight to the Source Asking your loyal customers what benefits they get from your products or services may be the easiest way to determine your differentiators. Going straight to the source gives you a foolproof and immediate answer that helps you avoid making educated guesses. You might ask them: Did you meet their expectations? Where did you exceed their expectations? Why did they choose you over your competition? What do they like about your business? Got Your Differentiators? Now Brag About Them Knowing how to use your key differentiators is just as important as determining them. Communicating these with your current and potential customers will help them understand how you will help them and what your business stands for. This starts by living and breathing your differentiators. Ensure everyone on your team knows what your business stands for and how you want to portray that through them. The best part of understanding your differentiators is you can use them in your marketing strategy. A solid marketing plan will be useful when capitalizing on your company’s strengths. Highlight these differentiators when creating ads, posting on social media, and talking about your brand, which will let people know what you stand for and offer them. Also, a well-executed marketing strategy will give you a competitive advantage in your industry. Overall, the real importance of differentiation in your business is to stand out and let your customers know what they are getting when using your product. Every few years, you must take a step back and reevaluate the importance and relevance of your company’s differentiators. They might change or stay the same, but keeping them core to your business can put you above your competition. About xendoo We share your passion for small businesses and are inspired by your dedication to making your dreams a reality. That’s why we’re committed to providing you with the financial visibility and support you need to thrive. More Than Just Numbers It’s more than simply crunching numbers. It’s about building meaningful relationships with our clients and understanding their needs. Our people-first mentality ensures you receive personalized attention and expert guidance throughout your financial journey. A One-Stop Solution xendoo offers a comprehensive suite of services, including: Full-service bookkeeping and accounting team to free up your time and resources. Hassle-free tax preparation and filing  Fractional CFO Services to work with you on a  roadmap of future growth A dashboard that provides real-time financial insights Passionate about your success? xendoo is, too. We provide the financial visibility and support small businesses need to thrive and scale. Let us handle the financial burden so you can focus

Free Small Business Expense Tracking Spreadsheet

Two people exchanging receipts and money

Small business expense tracking can be tedious, but it’s one that all companies–from “mom and pop” shops to international enterprises–must do. Fortunately, business expense tracking apps make the job easier. An app is ideal if you have a business with many employees, sales, and tax considerations. For some small businesses, however, paying a subscription fee for an expense tracker may not be feasible in the beginning. In this case, they can use a free business expense tracker or template. While expense tracking will remain manual, it will keep their finances organized in one place.  We’re sharing a free business expense tracking spreadsheet that you can use. You can jump to the spreadsheet here and scroll further to learn how small businesses can keep track of expenses for free or at little cost. Why do you need to track small business expenses? What are common business expenses? What is the best way to track expenses for small businesses? Small business expense tracking spreadsheet Why do you need to track small business expenses? As you may know, you’re required to file taxes each year. Come tax time, no one wants to sift through old receipts to account for each expense.  Once you start expense tracking regularly, you can eliminate such hassles. Moreover, up-to-date records ensure that you file tax returns accurately. Therefore, should the IRS audit your company, you won’t have anything to worry about. Besides saving you time, you’ll also want to track expenses to take advantage of tax deductions and better financial health. Tax Deductions Everyone has to deal with taxes every year–companies and individuals. You may be eligible for tax deductions for certain expenses or activities. If you qualify for a deduction, you can lower the tax amount you owe and use the savings to grow the business.  While it may surprise you, many small business expenses qualify for tax deductions. However, only a small proportion of small business owners benefit from them. This is primarily due to inadequate expense tracking practices and not knowing how much you can save. With reliable accounting software, you’ll have expense reports. These will give you a complete picture of your spending and tax deductions. If you’re unsure what counts as a deduction, you can review our list of over 20 tax deductions for small businesses. Financial health Data from the Bureau of Labor Statistics (BLS) shows that 20% of small businesses fail within the first year. This figure rises to 50% by the fifth year. But there’s a silver lining.  Most of these businesses do not fail because there’s no market. Surprisingly, some companies make a lot of money and still fail. Some of the reasons for this include: Financial mismanagement Cash flow issues Unsustainable growth Poor planning As you can see, all those factors are related to finances. By ironing up your expense tracking processes, you can significantly increase the chances of success for your business. You’ll be able to quickly spot unnecessary, unusual, and fraudulent activity that may bring your business down.  This way, you can limit business expenses to necessary expenses and prevent costs from going overboard. In addition, you can learn how to read and interpret financial statements.  What are common business expenses? Businesses in varying industries have different expense profiles. Even still, there are expenses that almost all businesses have. In the expense tracking spreadsheet, you’ll find areas to record each of these expenses, including:  Advertising and marketing – Costs associated with hiring a marketing agency or a consultant. Auto expenses – If you use your car for business, you can expense repairs and mileage. Bank charges – Fees and costs for a business bank account and credit cards. Commissions – They will be recorded here if you pay out sales commissions. Contract labor – This is for businesses that hire freelancers or contract employees.  Interest – If you have a business loan, its interest is considered an expense. Legal & professional – Consult with lawyers, accountants, and other professionals. Merchant fees – These are costs that merchants like Shopify and Amazon charge. Payroll, payroll taxes, and processing – Expenses related to paying employees and processing those payments. Recruiting & HR – Costs associated with finding and hiring employees. Training & Education – Expenses related to furthering your or your employees’ business education. Software and tools – Many tools you use for your company are expenses (and tax-deductible). Rent or lease – If you have a physical store or office, you can add it as an expense. Utilities – Many utilities, including the Internet, are business expenses. These are just a few examples. You’ll find more inside the small business expense tracking spreadsheet.  What is the best way to track expenses for small businesses? At this stage, you know why it’s important to track business expenses, but how do you do it? You have two options: business expense tracking spreadsheets or apps.  1. Business expense tracking apps The best options for business expense tracking are expense tracker apps. These solutions sync to your bank accounts and business credit cards and categorize your expenses. This eliminates most of the manual work and automates inputting the costs yourself in a spreadsheet. As a result, the only expenses you usually add manually are those you pay for in cash. Such solutions generate expense reports in addition to maintaining expense records. These reports help you understand your spending habits and how they impact cash flow and financial health. You don’t have to set time aside for this. You can review your expenses using a mobile app while on the go. Overall, they reduce the amount of time you spend on expense records.  Some business expense tracking apps include:  Mint Quickbooks (integrates with xendoo) Xero (integrates with xendoo) Zoho Expense Expensify To learn more about each app and if it’s a good fit for your company, you can view our guide to expense tracking apps here.  2. Business expense tracking spreadsheets While business expense tracker apps may be ideal, they’re sometimes

Lil Roberts joins Kison Patel of Boss Move Podcast to Discuss The Elements of Success

Lil Roberts on Boss Move Podcast

Success is not about luck and chance. It’s about visionary leaders who intentionally pursue the critical elements every business needs to be successful. Join Kison Patel from Boss Move Podcast and his guest Lil Roberts, Founder, and CEO in the episode Critical Elements of Success as they talk about the secret ingredients for success and how to get them.

Lil Roberts, CEO Joins The y.FTL Panel at Endeavor Miami

Lil Roberts as a speaker at Endeavor Miami

Endeavor Miami hosted their y.FTL panel, the second panel in their y.FLORIDA series. Lil Roberts, xendoo’s CEO was one of the speakers. As Florida’s entrepreneurial ecosystem continues to develop they will continue to shed light on the strength of Florida’s entrepreneurs. Honored to be part of an amazing night with incredible people!

xendoo vs. Pilot: Comparing Online Bookkeeping Services for Small Business Owners

Xendoo vs Pilot

Bookkeeping is critical to the financial health of every business, but business owners rarely have the time (or desire) to manage it themselves. To take their time back, many business owners choose to outsource their bookkeeping and accounting. There are many options available, from traditional CPAs to tech-savvy online companies. So, how do you choose the right financial partner for your business? Today, we will take a look at two popular providers: xendoo Online Bookkeeping and Pilot. Both provide quality online bookkeeping and tax services, but there are some key differences in features that will help you weigh your options: Online bookkeeping and tax services  Accounting software  Accounting methods In this blog post, we will explore these key differences so that you can make the best choice for your business! Online Bookkeeping and Tax Services  Most of xendoo’s online bookkeeping packages are tax-inclusive, with prices starting at $295 per month. Plans can be paid monthly or annually, whichever works best for you. We reconcile your books weekly, and deliver your reports as early as the 5th business day of the month, depending on the plan you select! Pilot offers three online bookkeeping plans, with prices starting at $599 per month, all of which are paid annually upfront. Tax services are available at an additional cost and must be purchased separately.   If you are behind on your bookkeeping, xendoo and Pilot also offer catch-up services so you can get previous months’ books in order!  Accounting Software Most small business owners manage their finances in a variety of ways, the more software options, the better! That is why xendoo works with both Quickbooks Online and Xero. Depending on the nature of your business, one of these options will be able to meet your specific needs.    Pilot only offers Quickbooks Online. If you are already working in Xero, they will have to switch you to QBO and leave your history behind. While QBO is a solid option, it may not be the ideal choice.   Accounting Methods Accounting methods determine when income and expenses are recorded in your financial statements. They affect how cash flow, profitability, and business performance are tracked. The method used depends on your business and tax needs.    xendoo and Pilot use different accounting methods, with one exception: cash basis accounting. Depending on the plan you select, xendoo will use a cash basis or modified accrual basis. Pilot defaults to an accrual basis on all plans, but you can request a cash basis.    Cash basis accounting is a method in which revenue is reported only when cash is received, and expenses are noted when money leaves your account. It is often used by small businesses because of its straightforward nature.  Accrual basis accounting records income once it is invoiced to the customer and records expenses once the bill is entered (even if it has not been paid yet). This is a complex method, used mostly for businesses with $5 million or more in annual revenue. Modified accrual basis accounting combines the best aspects of accrual and cash basis. It recognizes prepaid expenses and offers accrual for inventory and other Balance Sheet categories. As accrual basis accounting is the most complex method, it is the most expensive and time-consuming method to complete. Even if your business needs to account for inventory and accounts payable and receivable, the accrual basis method may not be necessary. The modified accrual method can meet your business needs in a cost-effective and timely manner.    We recommend speaking to your accountant to determine the ideal accounting method for your business.  Try Us Out xendoo offers a free trial in which we complete your bookkeeping from the previous month, plus the Profit and Loss Statement and Balance Sheet, so you can experience the xendoo difference for yourself. If you decide that xendoo is not the best fit for you, we will gladly connect you with others in our network so you can find your ideal financial partner. The data and reports are yours to keep in your QuickBooks Online or Xero account. If you choose to partner with us, you will have access to a comprehensive customer portal, with data-driven visualizations, and your financial reports at your fingertips 24/7.  At this time, Pilot does not offer a free trial. They do weekly demos where business owners can tour the platform and ask questions.   For a brief summary of how xendoo and Pilot compare, check out the chart below:   Who is Right for You?  It depends! Every business owner needs financial visibility into their numbers for effective decision-making and growth. If you are looking to simplify your books, xendoo is the best choice for timely, accurate, and worry-free bookkeeping, accounting, and tax services for you and your business.  xendoo is a team of real people that care about you and your business. Allow us to handle the hassles while you put more money in your pocket, reduce your stress, and get back to doing what you love. So, are we a fit for your business? Let’s talk! Schedule your free consultation today!

xendoo vs. QuickBooks: The Difference

Xendoo versus QuickBooks

As more small businesses crop up throughout the country, many business owners are starting to realize that a significant task in managing a company, big or small, is bookkeeping.  From choosing an accounting method to managing transactions to setting up payroll, bookkeeping can be an extremely confusing and time-consuming process! That’s why many business owners decide to get bookkeeping help, whether they use a form of online bookkeeping software or hire an accountant.  For many companies, the best move is to do both! When it comes to running a business, you may have debated the benefits of providers like xendoo and tools like QuickBooks. But which option will work best for you? Let’s break it down and discover what will work best for your business: xendoo vs. QuickBooks.  What Is Accounting Software? Most of us are familiar with the term “software.” Basically, this refers to any sort of program or application you run on your computer that helps you perform a task or complete a goal. Software can come in many forms, from music players and photo editors to games and word processors.  Accounting software is a program or application that assists you with accounting or bookkeeping tasks. Also referred to as bookkeeping software, it can assist your business with functions like: Accounts payable Accounts receivable Purchase orders Sales orders Payroll Reliable accounting software will also store your company’s financial data. Some companies prefer to create their own accounting software to fit their specific needs, while other businesses can manage best by purchasing third-party software packages like QuickBooks. In some cases, a combination of in-house and third-party software is also possible.  The greatest advantage to any accounting software is that it’s available online at any time and can be updated in an instant. When you compare that to the traditional form of bookkeeping with pen and paper, you can see why investing in online bookkeeping software is so popular in the 21st century!  Why Do You Still Need an Online Accounting Service? As a business owner, one of your many responsibilities is finding ways to save money for your business. For a lot of enterprises just starting up, doing online bookkeeping yourself seems like a great way to cut costs. Unfortunately, trying to achieve cost savings by performing highly complex professional work yourself will likely end up backfiring! Even seemingly small mistakes could also actually cost you a lot of time in the long run. Additionally, you may miss out on important tax benefits, deadlines, and requirements if you simply try to do it all on your own. In the battle of xendoo vs. Quickbooks, here are some of the other benefits that you can expect from your online accounting service: Bookkeeping When you work with xendoo, a dedicated team of experts will take care of all of your online bookkeeping needs — and they’ll do it on time. In less than an hour, we can set up your accounts and get you connected in a view-only mode.  Once all of that is ready, we’ll reconcile your books each week to ensure that everything is up to date and in order. This leaves you the time that you need to do other kinds of practical work that will help grow your business.  While we take the time to keep all of your books in a row, you can check in on your finances whenever you’d like. With our customer portal, you receive monthly reports that track everything you need to stay in the loop. Even if you can’t spend the time to go through all of the details, you can trust that our experts will.  Catch Up Did you know almost a quarter of all business owners report that they are currently behind on their bookkeeping responsibilities? That’s why another great accounting service offered via xendoo is the ability to provide catch up bookkeeping when you’re behind—not something an online bookkeeping software alone can manage!  So forget about the stress of catching up on your finances by yourself. At xendoo, we can get all of your financials up to date, whether you are a few months behind or a few years behind.  Taxes While it would be much easier just to pretend they don’t exist, paying your taxes as a business owner will always be a part of the job. Going through the filing process and wondering whether you’re doing it right will likely cause you to lose some precious sleep.  xendoo can take on this major responsibility for you, helping your business to find ways to make the most of tax season. When your business has its books in order, filing taxes is much easier. We won’t just connect you with a random CPA during tax season, though—you’ll have a dedicated, certified account available at all times, whether it’s on April 14th or October 14th.  How Your Accounting Team Leverages the Best Software Because these accounting programs can manage to save you time and money, we wouldn’t expect you to simply throw them out the window and lose everything you’ve already invested. That’s why your xendoo accounting team can fully integrate with practically every software out there, whether it’s QuickBooks, Xero, Amazon, Shopify, or any other program.  Your team will work with the software program you’ve got to find better ways to manage your finances. Think of it like this: The software is your car and xendoo can be the driver. We’re not just any driver, though; we’re a Formula 1 champion racer.  Your team will be available to you with whatever form of communication is most comfortable for you: email, call, or text.  At xendoo, our professionals aren’t just there for your business transactions—they can even help you with your personal tax returns! You can rest assured everything will be monitored, managed, and maintained, all without having to lift a finger. xendoo vs. Quickbooks: The Final Considerations Whether you run a small cafe with less than $20,000 in monthly expenses or an up-and-coming restaurant with more than

Tips to Increase Retail Sales for Your Small Business

A restaurant worker helps two customers purchase wine

This past year has been incredibly hard on retailers, especially small businesses. Retail sales plunged more than 20% between February and April last year, but with pandemic restrictions easing, the industry is starting to recover. As folks are venturing out more, it’s the perfect time to refresh yourself and your sales associates on tips to help increase retail sales and work towards building your business back up! Make your customers feel safe Many people are finding it tough to return to their pre-pandemic selves quickly and are still moving with caution. Help them feel at ease by reminding them they are safe in your shop. Take note of what protocols major retailers are following. For example, hand sanitizer can be available at the entry and the register. Use signage to share your mask policy, cleaning protocol, and any policies on the dressing room or how to use ‘tester’ products. The safer customers feel, the more likely they are to purchase, which will help increase your retail sales. Curbside pickup and local delivery  Many stores began offering curbside pickup and local delivery in 2020, and most customers have become accustomed to these services. Keep in mind that today’s customers value convenience,  so continue to offer these alternative methods moving forward.  Train your staff While refreshing your team on cross- and up-selling, ensure they are up to speed on the basics, too. For example, do they need a reminder on any specials or promotions you offer? Ensure they are experts on your store’s products and are as informed as possible on your customer service expectations. Please encourage them to think ahead about how they might answer specific questions customers might ask, including all frequently asked questions. If your staff can put your customers at ease, they are more likely to purchase from you than your competitors. The savviest sales associates know how to cross-sell and up-sell. When a customer is interested in one particular item, the savvy salesperson suggests a corresponding item to go along with it. “If you like that, you will love this, too!” Up-selling suggests a more expensive alternative to the item the customer is already interested in buying. “Oh, that one you have is great, but have you seen this (more expensive) version?” If your customer leaves with an item they will enjoy more and feel like they got a great deal, they are more likely to be a repeat customer, which can further help increase retail sales. Merchandising Make the way you merchandise or display your products a priority. Keep your displays fresh and regularly move merchandise around the store, creating a sense of newness and having your regular customers look at products they may have otherwise passed. Feature new and seasonal products near the entrance. Keep everything clean and organized, and ensure it’s easy to navigate the store. Keep popular and inexpensive items near the registers to encourage impulse purchases during check-out. It would be best to keep up on your inventory accounting to ensure that those displays have enough product. Make it personal  80% of companies are more likely to purchase from a company that offers them a personal experience. So, how might your store offer a personal touch? Branded items are a great way to connect with your customers creatively – ensure your logo or taglines are on bags, receipts, and automated email receipts. Consider slipping an extra treat into shopping bags, too. Perhaps a small button or magnet with your logo and website. And the best way to get personal is to connect with your customers. Make it a priority to chat, remember their names, and take note of the types of products that interest them. Loyalty programs Customers love loyalty programs! Many small businesses still enjoy using classic “buy 10, get 1 free” style punch cards, but there are great digital-focused loyalty programs, too. Options like Loopy Loyalty and Smile.io encourage customers to shop with you again and engage with your brand. And get creative! These programs offer ways to customize the program to match your branding and speak to your customers. As you build your loyalty program, ensure you aren’t creating an unattainable goal. Earning $5 for every $25 you spend feels much more exciting than earning $1 for every $50, right!? Make time to analyze Small retail store owners are notoriously stretched for time, but it’s essential to set aside time to review what sales tactics are working and what aren’t. Look at the numbers and strategically think about what might have led to increases or dips in sales on any given day. This is where having professionals like the team at xendoo manage your retail bookkeeping can go a long way. You can quickly review the numbers through accurate and timely reports and determine the most effective sales strategies. It’s an exciting time for retailers to have a fresh start! Seize the opportunity to train your staff on new sales tactics, refresh your inventory offerings and displays, and get creative with new ways for your customers to engage with your brand. By outsourcing your bookkeeping and accounting to the team at xendoo, you’ll save time and money, and you’ll finally have the data you need to be more strategic about increasing retail sales and remaining profitable.

How to Setup Your Online Store to Integrate Accounting Software

A business owner integrates her accounting software for her eCommerce site

You’ve set up your online store set, and orders are starting to come in. But in your rush to pack, ship, and sell, there’s a good chance you haven’t made time to integrate accounting software with your eCommerce software. By downloading a third-party app plug-in, you are just a few clicks away from saving time and money by automatically sharing data between your accounting and eCommerce programs. It sounds like a lot of work, but it’s simple! Most popular online accounting software options like QuickBooks, Xero, and FreshBooks all have a menu where you can search for compatible app plug-ins. And most popular eCommerce programs like Shopify, Squarespace, and WooCommerce have a corresponding app available from a third-party software developer. So you can easily install an app to sync the two programs!  What to Look for E-Commerce Accounting Software As soon as you begin spending or making money, it’s time to set up your eCommerce bookkeeping and start accounting. There are many affordable online eCommerce accounting software options available. Programs such as QuickBooks Online or Xero store a business’s financial data in the cloud and are always connected to the internet. In addition, they automatically receive and update your data by connecting to your bank accounts. Sounds easy, but not all accounting programs are the same, and there is a lot to choose from. When deciding which program is best for you, you’ll want to consider the following: Compatibility – Does the program work with all of the devices you plan to use? How many users can be simultaneously logged in? Can your international team members log in, too? Cost – Many options have a free plan, but the pricing goes up as your business scales and grows. Support – What are the customer service options? Does the program offer expert bookkeepers and accountants you can hire to take on the work when you are ready to delegate? Can they help you file your taxes? Additional Services – All of the programs offer basic bookkeeping and financial reporting, but what kind of extra offerings does the software have? Some eCommerce trends include hefty employee management solutions to help with payroll, time tracking, and benefits, while others may offer project management tools. Some offer payment processing through third-party partnerships. Integrate accounting software with your eCommerce program – Make sure the two programs sync so you can limit the amount of data entry you are doing. Ideally, you will be able to eliminate manual data entry of sales, invoices, customers, products, and more.  Most popular eCommerce software options, such as Squarespace and Shopify, integrate easily with third-party app plug-ins compatible with accounting programs like QuickBooks and Xero. Once synced, your inventory, orders, customers, and shipping can be automatically updated and will stay accurate. And getting started is easy! Most of these integrations only require a quick authorization and a few clicks to import your eCommerce data into your accounting program. Below is a list of some popular eCommerce platforms that offer integrations with popular online accounting software programs. Keep in mind that this list isn’t exhaustive, but these are the most popular eCommerce platforms that easily integrate with accounting software like Xero and QuickBooks Online.  Squarespace WooCommerce BigCommerce Shopify Square Integrating your accounting software with your eCommerce platform can help save you time and money. You’ll be able to get an instant view of your financials, allowing you to plan your sales strategy more effectively.  As your eCommerce business grows and you decide to sync your eCommerce software with your accounting software, there are many aspects of eCommerce and accounting that you will want to keep in mind for this integration. For example: Inventory Management – You will want to be able to connect multiple sales channels such as your brick & mortar’s Point of Sale, your Online Store, and your Pop-up location to ensure stock levels always stay up-to-date. Choosing the correct payment gateway – Does the available option match your needs? Will international business be supported? Tax settings – How does the software help you with your sales tax reporting? What role does it play in monitoring important tax deadlines?  Why You Should Outsource Your E-Commerce Bookkeeping and Accounting As your eCommerce business grows, you will want to outsource your bookkeeping and accounting to professionals. Even though app integrations with the best accounting software for small businesses are great, many automatic tools such as your monthly reconciliation can be inaccurate. Even a minor error in your bookkeeping can have a ripple effect and lead to everything from your financial reports being inaccurate to your marketing budget and your tax payments. It’s best to have an experienced set of eyes on it! These professionals can even find tax breaks you were missing and help you save even more money! Spend more time growing your business and less time crunching the numbers by working with the team at xendoo.  [av_sidebar widget_area=’Blog Post Disclaimer’ av_uid=’av-om2w’]

Choosing the Right Accounting System for Your Shopify Business

Accounting software for Shopify businesses

Editor’s Note: This post was originally published in October 2017 and has been updated for accuracy and comprehensiveness. Whether you’re brand new to online retail and trying to decide how to set up your eCommerce business, or you’ve been around a while and simply reached the point where your DIY accounting solution just isn’t cutting it anymore, xendoo’s innovative suite of business offerings can help you. xendoo can get your small business accounting running like a well-oiled machine so you can focus on what’s important – growing your business. To be competitive in the new economy, cloud-based accounting is no longer a luxury; it’s a necessity. Here are some of the best accounting systems for Shopify that can help get your business on track. QuickBooks Online QuickBooks Online is the cloud-based version of the popular and versatile QuickBooks business accounting software. Quickbooks Online accounting system for Shopify allows you to access your account information from any web browser, and the API creates a seamless interface that links directly to xendoo’s platform. That means you can easily organize and sync all of your critical financial data with no tedious manual data entry. Additionally, Quickbooks Online for Shopify allows you to easily create and send invoices, receive payments, pay bills, and manage payroll.  Track income and expenses Capture and organize receipts according to your chart of accounts Download and organize bank account and credit card transactions Print checks Create and send invoices, as well as receive payments Print financial reports Tax organization Xero for E-commerce QuickBooks is a popular accounting system for Shopify, but it may not be the best choice for everyone. Xero is another cloud-based accounting solution that will appeal to a lot of Shopify store owners. Xero is fast, simple, and powerful. It can sync with hundreds of third-party applications for point-of-sale, inventory, and much more. It also offers a mobile app for convenience and allows customers to create an unlimited number of users. From within the Xero accounting software for Shopify, you can manage your accounts payable, accounts receivable, budget, and category or division tracking.  Customizable dashboard Create invoices and quotes and receive payments Track inventory Bill payment Expense management and project management Create and print financial reports Bank account reconciliation Highly scalable for small or growing businesses A2X for Shopify A popular middleware, or “connector,” application that links your Shopify store with your cloud-based accounting system is A2X for Shopify. It automatically posts your Shopify sales and fees directly into QuickBooks or Xero, saving you hours of tedious work each week. That also means no more stressing over why transactions don’t match your bank deposits because A2X eliminates data entry mistakes. Automatically post store data into QuickBooks or Xero Automatically reconcile bank statements Automatically make adjustments for fees and refunds Create and print summarized statements TaxJar for Shopify A major time vampire for business owners who sell on Shopify is state sales tax compliance in the wake of Wayfair, Inc. v. South Dakota (2018), which requires online sellers to comply with sales tax requirements in each state where they do business. TaxJar accounting system for Shopify will streamline your sales tax compliance process by showing you where you should be collecting sales tax according to economic nexus laws and generating return-ready reports. It can even auto-file your returns for you if you want. Calculate sales tax based on each state’s nexus Daily updates allow for timely return filing AutoFile option for automated return filing Display fines and penalties for delinquent filing Compare actual collections to what should have been collected Shopify Apps In addition to your accounting software, Shopify offers over 1,000 plug-in applications from their app store to help you with managing inventory, shipping, reporting, and much more. However, we suggest that you fully explore the capabilities of QuickBooks, Xero, A2X, and TaxJar before making any decisions about additional applications. A lot of functionality might be duplicated, and you certainly don’t want to pay for the same thing twice. In addition to tons of helpful plug-ins, Shopify also features a profit margin calculator. Just plug in your cost of the item and a markup percentage, and Shopify will calculate the sale price, your gross profit in dollars, and your gross margin. Outsourcing Your Bookkeeping and Accounting Even though these accounting systems for Shopify can make life much simpler for sellers than even just a few years ago, it can still sometimes feel overwhelming. If you begin to feel like you might be in over your head, you should consider outsourcing your accounting and bookkeeping to a small business accounting firm like xendoo. There are a lot of good reasons to outsource your accounting for your Shopify eCommerce business, and it’s more affordable than you might think. xendoo’s accounting team works with small business owners just like you to provide expertise and insight into the accounting needs of e-commerce businesses. xendoo can take care of everything from weekly bookkeeping to filing business taxes for you, and our flat monthly fee is less than half of what you’d probably pay an accountant. xendoo’s mission is to give you the peace of mind of knowing it’s being done right, and free your time to focus on what’s important – growing your business. Sign up for a free trial today. [av_sidebar widget_area=’Blog Post Disclaimer’ av_uid=’av-om2w’]  

The Best Online Accounting Software for Small Businesses

Online accounting software tools

A skilled accountant will keep you tax compliant and ensure that you’re always in-the-know and focused on the big picture when it comes to your financials. Yes, you could try to do it all yourself, but do you have the time or expertise? (Or the interest!?)  And cost can definitely feel like a huge barrier here – it can be hard for a small business to afford to hire an accountant. Additionally, if you wait until tax time to get it together, it can end up giving you a real headache – hiring an accountant at the last minute with books full of errors could cost you more than you set aside in the first place. Thankfully in 2021, there are many affordable online accounting software options available for small businesses. What does online accounting software do? Online accounting software stores a business’s financial data in the cloud, and is often used to perform business transactions such as invoicing clients and cutting checks. Most modern accounting software platforms, such as Quickbooks Online or Xero, are always connected to the internet, and they automatically receive and update your data by connecting to your bank accounts. With these platforms, you have access to your books from any internet-capable device, like your laptop or smartphone. Most of these programs automatically enter, store, and analyze data for you which is especially useful for saving time on tasks like bank reconciliation. Not all accounting programs were made equally, though! Different kinds of accounting software programs are made for different businesses. Some come with tons of features and are good for larger teams or international markets, like Xero, while others focused on small businesses with a sole bookkeeper, like Quickbooks. The best online accounting software for a small business offers useful tools like invoicing, bill payment, payroll, and financial reporting. Many even offer tools for project management and time tracking. xendoo can take much of the daily bookkeeping work off your plate—we utilize Quickbooks and Xero accounting software, so you have ownership of your financial records while benefiting from the xendoo online bookkeeping and accounting team. Why your small business needs accounting software Your small business can benefit from online accounting software if you’re just plain bad at math, unorganized, or find it hard to conceptualize finances and consistently track incoming cash. Having a clear set of invoice and payment records is one of the most important things a small business can do to set itself up for success. Online accounting software provides tracking and up-to-date visibility to the financial health of your business, so you can make smart decisions and be tax-ready all year long. And the most common reason of all for why your small business needs accounting software is that you are too busy focusing on the ins and outs of running your business to take on all of the bookkeeping, accounting, and taxes on your own! Our picks for the best online accounting software for small business:  Xero Xero prides itself on providing fast, simple, powerful accounting software that all of your users can access at the same time, regardless of their different locations or operating systems. Xero offers a variety of user-friendly features to help you run your business, such as paying bills, claiming expenses, and accepting payments.  The Xero model of using a single unified ledger is particularly helpful for businesses that have team members working internationally or even in different time zones – everyone can work in the same books at the same time. And it’s a good choice for businesses that are growing or that change frequently – Xero is known for having a large amount of secure connections with financial institutions around the world and integrates with more than 500 third-party apps, plug-ins, and products so you can craft a solution that meets your ever-changing needs. Choosing Xero for your accounting software needs is a great choice, but keep in mind that you will still need to manage the software on your own, perform your own data entry and bookkeeping, and will likely still need to hire an external CPA for tax filing. If you don’t have any bookkeeping experience there’s always a chance you will use the tools incorrectly. Additionally, Xero might not be the best choice for you if phone support is important to you as they only offer customer support over email, or through their online resources. Wave Wave offers online financial software designed with entrepreneurs in mind. Sole proprietors love the price tag – they offer accounting software, invoicing, and receipt scanning for free. Keep in mind these are the tools – you will still need to understand how to manage it all on your own. Without any background or experience, there is always a chance you will use the tools incorrectly. Additionally, under separate paid plans, Wave offers bookkeeping services, payroll services, and online payment processing. It is an excellent choice for very small businesses but isn’t suitable for larger businesses. Unlike most other online accounting software options, Wave doesn’t offer robust mobile apps or additional useful tools like project management and time tracking. It’s the best free option for basic accounting software but lacks additional features that growing businesses need. Wave is owned by the tax preparation company H&R Block. QuickBooks QuickBooks Online is one of the most popular accounting software options for small and mid sized businesses. QuickBooks was originally released in 1983 and is owned by Intuit, who also makes financial programs TurboTax and Mint. QuickBooks Online is their online accounting software and offers all the robust features you would expect from financial software – accepting business payments, managing and paying bills, payroll options, customer support, and more – all for a set monthly fee. For additional fees, QuickBooks Online can connect you with recommended bookkeepers and advisors. QuickBooks Online is one of the most trusted online accounting software options out there, but keep in mind that you still need to know what you are doing – QuickBooks

Pass-Through Deductions: What It Is and Who Qualifies

pass through deductions

One of the best small business-friendly aspects of the Tax Cuts and Jobs Act (TCJA) is the 20% deduction you can take on your income tax if your business is a pass-through entity. Here’s what you need to know about it. What Is the Deduction The TCJA was passed in 2017 and first applied to 2018 tax returns. Provision 199A of that law states that you can deduct 20% of your “qualified business income” which was earned from a “qualified trade or business.” What Is a Pass-Through Entity Any business structure that allows you to receive income as an “owner’s draw” rather than as a regular employee is a pass-through business. The money is “passed through” from the company account to your personal account. You only pay income tax on it with your personal return; you don’t have to file a separate return for the business. Pass-through entities include:• Sole proprietorship• Partnership• LLC (limited liability corporation)• S-Corporation However, there are some restrictions. Taxable Income Restriction • Less than $157,500 (single, married filing separately, head of household) or $315,000 (married filing jointly): you qualify for the full 20% deduction.• $157,500 – $207,500 or $315,000 – $415,000, respectively: your deduction may be less.• More than $207,500 or $415,000, respectively: you are not eligible for the deduction. Specified Service or Trade Restrictions What your business does may disqualify it from the deduction. Here’s the list of excluded fields, as issued by the Treasury Department in August 2018: • Health• Law• Accounting• Actuarial science• Performing arts• Consulting• Athletics• Financial services• Brokerage services• Any business where the principal asset is the reputation or skill of one or more of the employees or owners• Any business that consists of investing and investment management, trading or dealing in securities, partnership interests or commodities But don’t give up if you see your business in one of these categories, because there are numerous exceptions. For example, in the Health category, healthcare providers who provide services directly to patients — such as doctors and dentists — are not eligible. On the other hand, health clubs, spas, medical research companies, and those who sell pharmaceuticals or medical devices may qualify for the deduction. In the case of businesses who both provide services and sell products, eligibility is determined by sales:• Less than $25 million in gross receipts and less than 10% of your business comes from disqualified services; or• More than $25 million in gross receipts and less than 5% of your business comes from disqualified services Employee and Property Restrictions There are two further conditions that could affect how much of a deduction you can take. They are:• Business that pay W-2 wages• Business that owns “qualified property” such as real estate or other tangible assets that can be depreciated If your business fits either of these descriptions, your deduction will be the lesser of:• 20% of qualified business income (or the “tentative deduction”); or• The greater of:o W-2 wages paid x 50%; oro W-2 wages paid x 25% + the unadjusted basis (cost) of your qualified property x 2.5% Still confused about the pass-through deduction? Your xendoo small business expert can clear things up, answer your questions, and help you get every tax break you deserve.